Unions oppose abolition of 1 and 2 cent coins

The European Commission is expected to rule in December on the possible abolition of the 1 and 2 euro cent coins. The CGT des Monnaies et Médailles fears that the disappearance of these coins will encourage retailers to round up their prices.

Production costs too high

For several years now, the European Commission has been talking about the possible withdrawal of 1- and 2-cent euro coins. More recently, it has once again put the subject on the table, basing its decision on a consultation of European citizens carried out between 2020 and 2021: 72% of the 17,000 voters did not find these coins useful.

According to the institution, these coins have a higher production cost than their face value. Between 2002, the year they were put into circulation, and 2013, the cost of minting them amounted to 1.4 billion euros, according to the Commission's estimates.

What's more, these coins often go unused and are not much appreciated by retailers, who are nevertheless obliged to accept them. Some European countries have already taken the plunge, rounding prices to the nearest 5 centimes: this is the case in Italy, Ireland, Belgium, the Netherlands, Finland and, more recently, Slovakia.

In France, 13 billion 1 and 2 centime coins have been put into circulation since 2002, with a further 300 million to be produced by the Monnaie de Paris by 2022.

Withdrawal of these parts could lead to higher prices

A decision from the European Commission was expected in the 2nd quarter of 2022, but the institution ultimately remained silent on the subject. However, according to MoneyVox, the Commission is expected to issue proposals in December.

" The idea would be to introduce rounding rules common to the entire euro zone," the Monnaie de Paris told MoneyVox.

For their part, the trade unions do not approve of abolishing these red coins. The CGT des Monnaies et Médailles is firmly opposed, and in a recent press release dismisses the production cost argument put forward by the European Commission.

According to the CGT, this argument is unacceptable because " it ignores the fact that a coin is intended to pass from hand to hand, and therefore to be used hundreds or even thousands of times. It is therefore irrelevant to stress at length, as the Commission does, that a 1 centime coin has a manufacturing cost of 1.2 centimes, which is higher than its face value ".

What's more, the union claims that the 1 and 2 centime coins enable " a price as close as possible to the real value of the good, plus the retailer's margin ". Eliminating them could encourage retailers to " round up prices to their exclusive advantage ".

According to the CGT, even if the European Commission were to lay down strict rules on rounding, it would be impossible to verify their application in every shop in the euro zone.

The union insists that inflation is likely to be exacerbated by the abolition of these coins, and that such a decision would not be understood, in this context, by European consumers. In 2018, the consumer association UFC-Que Choisir was already concerned about a possible rise in prices if 1 and 2 cent coins were abolished.