Unpopular 1- and 2-cent coins remain with us

Unpopular 1- and 2-cent coins remain with us

Despite cashless payment options, the euro countries want to continue to put euro coins into circulation on a large scale in 2019. The 19 states of the common economic space want to produce money in a total volume of 2.1 billion euros (previous year: 2.2 billion).

Of these, around 488 million euros are collector’s coins, as the approval of the european central bank (ECB) shows. Germany again wants to produce the most money. The volume in europe’s large economy amounts to 632 million euros, of which 231 million euros are for collectors.

The ECB sets an annual upper limit for the total volume of coins based on the needs reported by the euro countries. Within this framework, the countries will then be able to issue the coins.

1-cent and 2-cent coins are especially controversial. Many consumers find them burdensome because they accumulate in the wallet and make it thick and heavy. Traders like to take advantage of the psychological effect of low prices just below the full euro, but then they have to hand over small amounts of change at the cash desk.

In some countries, such as the netherlands and finland, rounding up and down has long been standard practice. However, the small change will remain legal tender there as well. The abolition of individual taxes could only be decided at the european level. As an argument for their abolition, critics also argue that the material costs alone for producing 1- and 2-cent coins far exceed their face value.

Despite criticism of the copper-plated small change, small coins are produced most frequently, measured in terms of the number of units. In 2016 and 2017, the eurolanders spent around 3.6 billion 1-cent coins and 2-cent pieces respectively. For comparison: 1-euro coin and 2-euro coin have been minted about 1.6 billion times each.

Because many of the small coins regularly end up in piggy banks or are lost – according to estimates, about two-thirds of the 1- and 2-cent coins – belgium complained of a shortage of cent coins this summer. Media reports quoted a spokesman for the local finance ministry as saying that they were already considering a national campaign to call on belgians to bring their copper coins to the bank in order to get at least some of them back into circulation.

Actually, munz bottlenecks are unlikely in individual european countries. Because if necessary, the central banks of the other countries will help out if there is a temporary shortage in the event of a stagnation.

Cash is still very popular in germany. However, cards – especially the girocard – are being used more and more often for payments. According to a study by the deutsche bundesbank, cash payments as a percentage of sales fell below 50 percent to 48 percent for the first time in 2017.

The introduction of smartphone payment services such as apple pay and google pay in germany last year gave a boost to cashless payment. According to the commerzbank, payment by cell phone will also become increasingly popular in the federal republic of germany.

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