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Europe considers phasing out one and two eurocent coins
The European Commission has launched a 15-week consultation* on the use and potential elimination of one- and two-eurocent pieces.
If support is favourable, which is likely on the basis of its previous 2018 report**, at the end of next year (2021), the Commission will decide if a legislative proposal on rounding up cash payments to the nearest five cents and/or discontinuing the coins altogether is warranted.
As part of the assessment, the Commission will “carefully study the economic, environmental and social impacts of introducing uniform rounding rules,” the document states.
The usefulness of the euro currency’s smallest denominations has been questioned since they were introduced, the Commission said in its 2018 communication. “The main aspects of this debate are these coins’ high production and handling costs compared to their face value, the high loss rate of these coins, and the falling purchasing power of these two small denominations, more than 16 years after the introduction of euro notes and coins.”
In Belgium, one of five euro area member states along with Finland, Ireland, Italy and the Netherlands, that already have rounding-up rules, the news comes almost as a case of “déjà-vu”.
In December 2019, the Belgian government announced businesses must round up or down prices to the nearest five cents – for example of supermarket checkout bills. While the small copper coins can still be used, the new ruling aims to reduce the amount in circulation.
The FPS [Federal Public Service] Economy said the coins are expensive to make and increasingly end up in citizens’ purses without ever being used.
The Commission says the experience of the five EU countries, including Belgium, that have already restricted one and two-cent coins, “will be very relevant in its assessment”.
In its 2018 opinion on Belgium’s introduction of rounding-up rules, the European Central Bank said it was important measures should be “established in a harmonised manner at Union, rather than at national level”.
Photo: A two-cent coin from Andorra. All eurocents feature the 12 stars of the European flag. Credit: The National Bank of Belgium.