Reuters
The European Commission is considering a proposal to phase out 1-euro
cent and 2-euro cent coins, an EU document showed, in what would be a ...
cost-saving move as the coins’ production and handling costs often
exceed their face value.
The possible measure is included in the EU executive’s working programme
for this year, released on Wednesday, and is scheduled for the
October-December period after an evaluation of the use of the two
smallest euro denominations.
Brussels is considering introducing rounding rules that would apply in
all EU states, so that consumers could pay without using 1- or 2-euro
cents. “A possible proposal would introduce common rounding rules to
address the challenges related to the use of 1- and 2-euro cent coins,”
the document said.
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Among
the 19 euro zone states, the Netherlands, Finland, Ireland, Belgium and
Italy have already passed rules that require or encourage rounding cash
payments in an attempt to reduce the use of the two denominations.
Rounding would likely be the first step before outright withdrawal of
those coins, as it would make them gradually fall out of use.
In a report published in 2018, the Commission had said rounding could go
together with an immediate withdrawal. Or it could be applied in a
“fading scenario” in which 1- and 2-euro cent coins would no longer be
issued, but would remain legal tender.
The Commission is still considering the best option. “There
is no final decision on that proposal,” EU Commission’s vice-president
Maros Sefcovic told a news conference on Wednesday.
In the 2018 report, the Commission said that issuing 1-euro cents “is a
loss-making activity for member states”. Italy stopped minting them in
2017. Procurement costs alone exceed the face value of this coin. In
some states also the costs of 2-euro cent coins are higher than their
value.
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An EU poll in 2017 showed citizens from euro zone countries overwhelmingly supported phasing out the coins.
To quell concerns of higher inflation caused by the possible move, the
Commission said in its 2018 report that countries where the use of those
coins has already been limited have not shown a (measurable) increase
in prices.
Prices would be rounded up or down to the nearest 5 euro cents when
making a cash payment. Lower costs for cash handling could also allow
retailers to lower prices, the commission report said.
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