Opinion of the European Central Bank of 4 August 2008 at the request of the Danish Ministry of Economics and Business Affairs on a draft executive order on withdrawal of the 25 øre coin as legal tender (CON/2008/35)
Date: 2008-08-04
Institutions: European Central Bank
Subjects: Denmark, issuing of currency, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 4 August 2008  

at the request of the Danish Ministry of Economics and Business Affairs 

on a draft executive order on withdrawal of the 25 øre coin as legal tender  

(CON/2008/35) 

Introduction and legal basis 

On  10  July  2008  the  European  Central  Bank  (ECB)  received  a  request  from  the  Danish  Ministry  of 

Economics  and  Business  Affairs  for  an  opinion  on  a  draft  executive  order on  withdrawal  of  the 25-øre 

coin as legal tender (hereinafter the ‘draft executive order’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European  Community  and  the  second  indent  of  Article 2(1)  of  Council  Decision  98/415/EC  of 

29 June 1998  on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft 
legislative provisions1, as the draft executive order relates to means of payment. In accordance with the 

first  sentence  of  Article 17.5  of  the  Rules  of  Procedure  of  the  European  Central  Bank,  the  Governing 

Council has adopted this opinion. 

1.  

Purpose of the draft executive order 

1.1  Under Section 3 of the Law on coins2, the Minister for Economic and Business Affairs, following 

negotiations  with  Danmarks  Nationalbank,  may  decide  that  coins  will  cease  to  be  legal  tender. 

According to the draft executive order, referring to negotiations with Danmarks Nationalbank, the 

25 øre coin will cease to be legal tender from 1 October 2008. Danmarks Nationalbank has argued 

that as a result of inflation and pay increases the purchasing power of the 25 øre coin has become 

negligible  so  that  it  no  longer  functions  as  a  useful  means  of  payment.  In  addition,  the  costs  of 

minting the coin exceeds its value, and as it is costly for banks and retailers to handle, as pointed 

out  by  their  representative  organisations,  there  are  good  reasons  to  make  the  50-øre  coin  the 

smallest Danish coin denomination.  

1.2  While the 25 øre coin will cease to be legal tender from 1 October 2008, the draft executive order 

provides that the coins may still be encashed at Danmarks Nationalbank for a period of three years 

after it has ceased to be legal tender. 

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2  

OJ L 189, 3.7.1998, p. 42.  
Lov nr. 817 af 21. december 1988, Møntlov. 

 
 
 
 
                                                 
1.3  As a consequence of the 25 øre coin ceasing to be legal tender and pursuant to Section 5 of the Law 

on coins, the draft executive order amends the rounding rules from 1 October 2008, with the total 

amount of cash payments to be rounded up or down to the nearest 50 øre, unless otherwise agreed. 

As  with  the  existing  rounding  rules,  only  the  total amount  is  to  be  rounded, and  not  the  price  of 

each item, and for electronic payments the exact amount is payable without rounding.  

2. 

General observations  

2.1  The ECB understands that the Ministry of Economic and Business Affairs issued a press release on 

27 March 2008 announcing the decision to abolish the 25 øre coins from 1 October 2008, which 

also  contained  a  reference  to  Danmarks  Nationalbank’s  website  with  further  details  about  the 

abolishment and explanation of the new rounding rules.  

2.2  As stated on Danmarks Nationalbank’s website, the number of coins is based on tradition, and is 

supported by surveys of the most suitable number of coins in a well-functioning series. The latest 

change  to  the  series  of  Danish  coins  was  made  in  1989,  when  the  five  and  10  øre  coins  were 

withdrawn as legal tender, and amended rounding rules were introduced. According to Danmarks 

Nationalbank, previous experience from Denmark, Sweden and Norway has shown that taking out 

of  circulation  small  coins  which  have  ceased  to  have  self-supporting  purchasing  power  does  not 

lead to higher prices. 

2.3  The  ECB  notes  that  whereas  the  Law  on  coins  requires  a  minimum  period  of  notice  of  three 

months, the draft executive order sets a generous period of three years in which the old coins may 

be exchanged at Danmarks Nationalbank. The ECB also notes that the Danish Bankers Association 

has recommended that its members encash 25 øre coins after 1 October without charging a fee. 

2.4  The ECB has no specific comments on the draft executive order. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 4 August 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

2