WRITTEN QUESTION E-0203/02

by Erik Meijer (GUE/NGL) to the Commission

(5 February 2002)

Subject: Protecting consumers by imposing conditions on the refusal by businesses to accept payment with coins of one, two or five euro-cents

1. Does the Commission recall that all decimal currencies which were previously the legal tender in the existing Member States of the European Union were originally divided into 100 cents and in some cases even 200 half cents, and that one-cent coins and other small coins only disappeared in a number of countries after the cent had almost completely lost its value as a result of currency devaluation?

2. Did the fact that the smallest values in the majority of the old currencies were worth around two euro-cents play a part in the fixing of the value of the euro and consequently of the cent at the end of 1998? If not, why not?

3. In introducing the euro, was the basic principle adopted that the smallest coins to be issued namely those of one euro-cent were to be of sufficient value to enable them to go on being used in cash payments in the long term, thereby putting an end to the gap previously occurring between calculated prices and actual payment as a result of the fact that, in cash transactions, prices had to be rounded up, for example, to five or 10 times the value of the cent because of a lack of suitable coins?

4. In some Member States, such as Finland, was it assumed right from the start that coins of one and two euro-cents would have no part to play, with the result that only small numbers of such coins were produced and they can be refused? Can individual Member States decide to abolish coins of one euro-cent or coins of other sizes?

5. Are shops and other businesses allowed to refuse to accept payment in coins of one or two euro-cents and possibly other coins and notes? Is the refusal to accept such payment still linked to the old condition that large sums cannot be paid using a large amount of small coins, or are there now other legal grounds for refusal?

6. Is the Commission prepared, in consultation with the Member States and the ECB, to take steps to ensure that businesses will only be permitted to decide, on grounds of internal considerations relating to cash management and administration, to refuse to accept small coins in circulation on condition that this leads to prices being reduced to the lowest multiple of the smallest coin accepted (2, 5 or 10 euro-cents) and never to rounding up being imposed?

Answer given by Mr Solbes Mira on behalf of the Commission

(21 March 2002)

1. and 3. The Commission studied the various existing denominations in close cooperation with the Mint Directors Working Group. A balance had to be struck between a large number of coins, which might have caused problems with recognition, and a small number of different coins, which would have made giving change difficult. The average number of different denominations in the European Union was 7.17(1). After discussion, the Mint Directors proposed a series of eight coins: 1, 2, 5, 10, 20 and 50 cents, and 1 and 2 euros. The possibility of producing a 5-euro coin was discussed but rejected in favour of a note of that amount. The reason for issuing six coins in cents is to facilitate conversion operations by enabling new euro prices to be as close as possible to the old prices in national currency. The formal decision on the denominations was taken on 3 May 1998, with the adoption of Council Regulation (EC) No 975/98 on denominations and technical specifications of euro coins intended for circulation(2).

2. The value of the euro was fixed in accordance with Article 123(4) of the EC Treaty, which makes no reference whatsoever to the small denominations of coins.

4. Finnish Law No 890/2000 on rounding prices in euros was adopted on 27 October 2000 and thus postdates the decisions on the production plans. The Commission examined the compatibility of this Law with Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro(3), Council Regulation (EC) No 975/98 and the consumer protection directives. It concluded that the Finnish provisions as a whole were compatible with Community law, since the 1-cent and 2-cent coins remained legal tender in Finland. Generally speaking, the Commission takes the view that a participating State may decide not to issue certain denominations of euro coins but may not refuse to recognise them as legal tender.

5. and 6. The only restriction on accepting euro coins laid down in Community legislation is contained in Article 11 of Council Regulation (EC) No 974/98: no party shall be obliged to accept more than 50 coins in any single payment. Any other limitations would have to be based on explicit national provisions, the possibility for which is provided for in recital 19 to the Regulation. The Commission has no intention of proposing any amendments to these provisions.

(1) There were 5 in Belgium, 7 in Denmark, 9 in France, 8 in Germany, 7 in Greece and Ireland, 9 in Italy, 5 in Luxembourg, 6 in the Netherlands, 7 in Portugal, 9 in Spain and 7 in the United Kingdom.

(2) OJ L 139, 11.5.1998.

(3) OJ L 139, 11.5.1998.