Could coins of one and two cents be phased out?

By the end of 2021, the European Commission will decide on whether or not to phase out one- and two-cent coins if it considers they are not used enough to justify continuing to mint them.

Firstly, the Commission will need to carry out full research to work out the impact on household and commercial finances, since eliminating the two coins of the smallest denomination of the euro would inevitably mean prices rounded to the nearest five or 10 cents.

Already, Finland, Italy, Belgium, Ireland and The Netherlands have approved legislation covering rounding up or down, but the remaining Eurozone countries do not have any specific laws.

This is likely to cause widespread debate, as the lowest incomes could be the hardest-hit: The most common non-rounded price seen anywhere ends in 99 cents, an age-old marketing trick designed to make a consumer think goods are cheaper than they are by paying attention to the first figure only.

Prices of, for example, €5.99, are viewed almost by reflex as being €5-and-something, rather than, effectively, €6.

Rounding up if one- and two-cent coins are scrapped means an extra cent added onto anything with a price ending in 99 cents; also, other random prices could rise by more.

In Spain, for example, the typical cost of a supermarket own-brand litre of milk is 57 or 58 cents, sometimes with the lower of the two applied if buying them in a box of six litres – this could mean an extra two to three cents a day per person added to the shopping bill for milk alone.

For a four-person household, just the milk bill could increase by €10.95 a year, without totting up all the extra rounded-up prices.

Items costing 56 cents or €5.22 or €2.51, as a guide, would typically go down, but these are much less common except in the weigh-your-own fruit-and-veg counters.

Whilst most middle-income households would not notice the difference, those at the lower end of the income scale would see an impact.

Even though paying by credit or debit card means, in theory, prices containing odd cents are not affected, only a very small number of European countries – most of them outside the Eurozone – are almost cash-free, and as yet, no country on earth has axed cash altogether, so the move would affect those without bank accounts or who feel more comfortable with cash, such as the poorer members of society, and the elderly.

Although some Eurozone countries have a higher cost of living than others, with wages and pensions that reflect these – meaning the odd cent here or there would not cause undue pain for even very low-income families – the European Commission does not want each and every different country in the common currency area to follow separate criteria.

Nothing will be decided without the full agreement of the member States involved, after a complete assessment of the environmental, social and economic impacts of changing the rules, the Commission assures.

Any future proposal will be based upon the conclusions of this assessment.

It could even mean that the decision to scrap one- and two-cent coins goes ahead anyway, but with a legal requirement for any affected prices to be rounded down to the nearest five or 10 cents, rather than up.

Although, given that in the private sector, companies are free to set their own prices, it could mean that they simply decide to put them up before the changes, or do so a few months afterwards once it is no longer seen to be linked with the coinage rules.

The European Commission is legally responsible for examining, 'periodically and closely', the use of the various coins within the euro as a currency on the basis of its costs, benefits, and how acceptable it is to EU citizens.

To find out what constitutes 'acceptable', a survey will be launched, open for completion over the next 15 weeks, which any public, private, commercial or non-profit association or organisation, national, local or regional authority, or ordinary member of the public, is allowed to participate in.

It is likely Spain, especially members of the public and non-profit associations, will reject the move – partly due to the impact on low-income households, and partly due to other factors such as charity boxes on counters.

The contents of these tend to show that customers are more likely to dump their brown coins in a charity moneybox when they receive their change than lower-denomination 'gold' coins, such as those of 10, 20 or 50 cents, or one or two euros.