The more problems they find they have, the more restrictive laws and regulations they think up. Normal businesses are strangled in bureaucracy, and many either cheat, leave, or go bust, and the government thinks that is due to not enough regulations and bureaucracy, so they think up even more of them.
Basket case Italy made the limit of cash transactions €1000 (in a country where cash transactions were traditional). Their economy went down the tubes. I heard they just raised it to €3000 again. One of the main sources of revenue is the VAT (Value added tax) from which the government rakes in many billions a year. Every café, restaurant meal, hotel bill, garden worker's bill, whatever, includes the VAT (they have no state sales taxes). Much of that comes from cash transactions. If people are allowed to spend their cash freely, the government will rake in the billions in VAT. If not, cash goes into the underground "black" economy and the government gets none of it. It's no accident that the larger European economies that are doing relatively well (e.g. Germany, Netherlands, Austria) are the ones that restrict cash the least. The problem children in the Western part of the EU (Belgium, France, Spain, Portugal, Italy) restrict it most, and fall into the bureaucratic rut of thinking that the problems's root can't be too much bureaucracy, so there must not be enough. A lot of the definition of insanity comes into play here.
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