Plans to ditch one- and two-cent euro coins have moved forward, as the Commission starts to crunch the numbers on new minting and pricing rules. Should the eurozone banish its two smallest denominations of currency?
They take up valuable wallet space and earn you annoyed glances at the supermarket checkout queue when you start counting them out on increasingly sweaty palms.
There are a number of more serious reasons to support a coppers phase-out. It would be another step forward to a cash-free system, long championed by advocates for digital societies, purely by removing two of the eight types of euro coin that are legal tender.
According to a recent Commission report, no longer minting ones n’ twos would make huge savings, both financial and environmental, by cutting back on raw materials and the energy needed to make, transport and dispose of the coins.
People increasingly support a phase-out. EU surveys show that nearly 65% want them cast back into the fire from whence they came. In 2017, only Latvians and Portuguese respondents said they want to hang on to the coins.
Your correspondent has a 4kg bag of coins, collected over too many years to admit to, that sit idly in a corner, unspent. Characteristically-Belgian bank opening times have thwarted me on several occasions, while the pandemic has shifted it down the list of priorities.
The virus is another consideration. In-depth research is still needed but there is enough anecdotal evidence out there to conclude that cash helps spread it around. Maybe coins do not have a place in our new hygienic world?
Or maybe they do? Aside from the needs of numismatists, there are other reasons why one and two cents might stick around in circulation. One is price increases, as rounding up or down would have to be done.
Rounded prices are already in place in Belgium, Finland, Ireland, Italy and the Netherlands, although the practice varies in how widespread and enforced it is. France is mulling the idea too.
Consumer groups worry that retailers will increase their prices so that they will have to be rounded up rather than down. For example, a €1.96 espresso should cost €1.95, unless an unscrupulous barista hikes it to €1.98 before applying the rules. Eccolo, a €2 caffeine shot.
The Commission insists that the Dutch and Finnish experience shows that there is little evidence of unfair price increases, as price transparency and market competition act as a safeguard.
Charities also rely on the lack of value we place on the smallest coins, as do those unfortunate enough to ask for money on Europe’s streets. EU officials will likely struggle to put an economic value on that aspect of currency policy.
But they will have to try their best because the Commission wants to complete its study next year, before publishing the findings at the end of 2021.
A betting man with access to plenty of loose change might predict that the EU will lay down common ‘rounding rules’, which member states will then swiftly ignore or forget to implement for years to come.
Basically, don’t expect to stop finding coins down the back of your sofa anytime soon.
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