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Spain passed a new law limiting transactions. The main limitation is a limit of no more than 2500 euros on cash transactions – a limitation that applies to business and individuals alike.

In addition, the law provisions a fine of at 10,000 euros at minimum for taxpayers who do not report foreign accounts that they hold, apparently trying to fight tax evasion.

Keeping an eye on foreign accounts is common in other countries, but comes at a time when many expats living in Spain are moving money out of the country.

The limit on cash transactions is even more peculiar: why would the government want to limit such moves? When countries defaulted on their debt or devalued their currency very significantly, such limits were temporarily put in place to prevent a capital flight.

Also in the scenario of a Greek exit, such limitations would likely be put in place over the weekend when it happens.  The next step would be a temporary ban on withdrawals.

Mish reports about this and notes that this step would just raise tensions, which are already very high. Rumors about a big bank being in trouble have circulated and were denied.