WRITTEN QUESTION E-4018/98

by David Hallam (PSE) to the Commission

(8 January 1999)

Subject: Demonetised coins and notes and the introduction of the euro

Is the Commission aware that, whilst Germany, Austria, Switzerland, the USA and others maintain all coins and notes as valid for use, other countries demonetise old coins when bringing new designs into circulation?

Is the Commission also aware of the considerable cost incurred and inconvenience caused to European citizens travelling throughout the Union when currency which they take back to their country of residence is demonetised in the country they have visited?

Whilst the arrival of the single currency in 11 Member States will remedy this problem for most of the EU in the long term, will the Commission take steps to ensure that coins and notes replaced by the EURO can be exchanged in any bank in any EU country for a period of, say, five years?

Outside the EURO zone, the inconvenience of demonetised coins may continue. As this fundamental question is a hindrance to freedom of movement within the single market, will the Commission propose to the four Member States concerned (and the countries applying for accession to the EU) that they allow old-design coins and notes to remain legal tender until they are all withdrawn from circulation over time or come to some arrangement to provide for the exchange of old notes and coins over a much longer period?

Answer given by Mr de Silguy on behalf of the Commission

(12 February 1999)

The introduction of the euro notes and coins will on its own eliminate in the future within the euro-zone the problems of demonetised foreign coins and notes mentioned by the Honourable Member.

With regard to national currency notes and coins which will be replaced by the euro, Council Regulation (EC) 974/98 of 3 May 1998 on the introduction of the euro(1) gives Member States the competence to set the end of the legal tender status of their national currency within the maximum period of six months after the end of the transitional period. The laws and practices of the Member States will apply to the exchange by the respective issuers of notes and coins.

In most Member States, national banknotes can be exchanged at the counters of the central bank which issued them, for an indefinite or a very long period (10 years) after they have lost their legal tender. Similar possibilities are offered by the issuing authorities for coins for a shorter period. In the framework of the definition of the scenarios for the 2002 cash changeover, Member States might consider it appropriate to extend the period for such exchange, given the exceptional situation.

In addition, with regard to banknotes, the implementation of Article 52 of the European central bank (ECB) statutes results in the national central banks offering during the transitional period the exchange free of charges of other euro-area banknotes in at least one location. This will give the possibility to the euro-area citizens to get rid of their foreign notes before they cease to be legal tender.

In the particular case of the introduction of the euro, the demonetisation of euro-area notes and coins is a well known and anticipated event and should therefore not create difficulties for the citizens who will have sufficient time to get rid of their euro-area national notes and coins.

(1) OJ L 139, 11.5.1998.