"He who does not honour the cent is not worth the euro" says an old proverb. But the one and two cent coins are soon to become history: The EU Commission would like to abolish the smallest copper coins for cost reasons. Germany and Austria, however, are opposed. Are the fears of abolishing cash justified?
Call for consistent rounding rules for the euro area
The EU's interest is primarily to establish uniform rounding rules. Consequently, the one and two cent coins are to remain legally valid as means of payment, but are to gradually disappear from monetary transactions in practice. Since the rights of rounding rules are still national matters, it is still legally unclear whether the EU can sanction their plan. Finland, the Netherlands and also Belgium are already pioneers of rounding rules. Eurozone countries could follow from 2021, when the planned end of one and two cent coins is decided in autumn 2020.
The copper coins pollute the environment
Eliminating copper coins from monetary transactions can counteract the annoying handling at the checkout and the superfluous ballast in the wallet. But copper money not only complicates the wallet, it also burdens the environment: the poor ecological footprint of one and two cent coins and the waste of resources of valuable metals, clearly speak for separate rounding rules and the disappearance of the coins from monetary transactions.
Up to 1 billion copper coins are minted annually in Germany alone. In Austria, there are already 250 million minted coins per year. Nevertheless, one and two cent coins show the greatest annual loss. Many copper coins become piggy-bank keepers or disappear from cash circulation for an unknown period of time. These are the reasons why so many copper coins have to be minted in Germany and also in Austria. In itself, the minting of coins is roughly cost-covering. It only becomes expensive with the logistics and the transport of the red copper pieces. For smaller EU countries, however, the production of the small environmental sinners is an increased cost factor, which is why many small nations also import the copper coins from neighbouring EU countries.
Finland as a pioneer of rounding rules
In Finland, purchase sums have been rounded to five cents in cash payments since 2002. In 2004, the Netherlands followed suit and adopted Finland's approach. Belgium, Ireland and Italy have created the legal basis for the rounding rules, but consistent implementation in practice is not known in either Belgium or Italy.
Cash remains essential
The Director of the Austrian National Bank is certain that the discontinuation of one and two cent coins does not mean the abolition of cash. Cash will remain a fixed and important component of the monetary economy in the future.
Digital payment does not mean the end of cash culture
anybill also recognises a positive development in the direction of digital payment. With the one-touch technology of anybill, payment is to be made with a linked means of payment and the digital receipt is to be received directly in the app. anybill is fundamentally independent of the means of payment and thus the user can decide for himself how he wants to pay and still receive the digital receipt.