1 and 2 cent coins obsolete ?: ECB puts billions of euro coins into circulation

Sunday, January 03, 2021

1- and 2-cent pieces obsolete?
ECB puts billions of euro coins into circulation

Are coins still up to date? Apparently yes for the EU. The ECB has announced that it will put billions in new coins into circulation. Most of them should be produced in Germany. A large part of it is said to be collector's items.

Despite the increased use of cashless payment options during the corona pandemic, the euro countries want to put euro coins into circulation on a large scale in 2021. The European Central Bank (ECB) approved the production of coins with a total volume of just under two billion euros, including collector coins. That is a little less than a year before, when the central bank promised the 19 countries that the common currency would issue new euro coins worth a good 2.1 billion euros.

Of the coin production planned for this year, a volume of 1,482.9 million euros is intended for daily use, plus collector coins amounting to 499.3 million euros. Germany also wants to produce most of the coins in 2021. The volume of Europe's largest economy amounts to 658 million euros, of which 241 million euros are collector coins. With a total volume of 321.5 million euros, Spain has the second highest value of new coins, while France ranks third among the euro countries with a volume of 293 million euros.

Bundesbank wants to hold on to small coins

The ECB sets an upper limit for the total volume of coins every year based on the needs reported by the 19 euro countries. In this context, the countries can then have the coins minted. One and two cent coins are the most controversial. Many consumers find them annoying. Some campaign for their abolition. "The EU Commission is currently hearing about 1 and 2 cents. Our position that small coins should not be abolished is the same as that of the Federal Minister of Finance," said Bundesbank board member Johannes Beermann. "I am of the opinion: As long as there are prices like 1.98 or 0.99 euros, the small coins are needed. And you shouldn't forget: There are people who are dependent on every penny."

The corona crisis has given cashless payments a boost. In an ECB survey in the euro area in July 2020, four out of ten respondents said they had used cash less often since the beginning of the pandemic. In the year before the crisis, notes and coins had already lost their importance for consumers. They are therefore still the most popular means of payment for smaller amounts at the checkout. However, the use of cards is increasing. "The predominance of cash is particularly high directly at the till, with around three quarters of all transactions, as the latest ECB payment behavior study shows," said Beermann. "I don't think there's going to be a massive shift."