Five years of Euro banknotes and coins
On 1 January 2002, the euro became a part of daily life for citizens from twelve EU Member States. Five years after the introduction of euro coins and banknotes, the European Commission assesses the current situation.
Communication of 28 December 2006 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Five years of euro banknotes and coins [COM(2006) 862 final - Not published in the Official Journal].
The European Commission reviews the introduction on 1 January 2002 of euro banknotes and coins into the daily life of citizens.
Informing citizens about the euro remains crucial
Surveys carried out among citizens show a lack of general information about the advantages of the euro, with insufficient information and even misconceptions remaining very widespread. The European Commission believes that renewed efforts are required to inform the general public about the euro, as the following still remain:
- lack of awareness of some of the euro's benefits: only a quarter (23%) of euro-area citizens know that no extra charges apply when withdrawing money with a bank card in another euro-area country, or when paying with a bank card (27%) or executing a bank transfer (16%) within the euro area;
- firmly-anchored misconceptions: a large majority of respondents in the euro area believe that the euro contributed to an increase in prices. In the ten Member States which joined the European Union in May 2004, 45% of respondents believe that the euro will lead to higher inflation. This stands at odds with the ECB's records, which show that annual inflation in the euro area has remained below 2.4% since the introduction of the euro in 1999;
- dual display of prices: for day-to-day purchases, a clear majority of citizens (57%) calculate in euros, while one in five still count in their former national currency. However, for high-value purchases, such as a car or a house, a large proportion of citizens (40%) calculate using their former national currency. The Commission repeats its recommendation of 2002 that any remaining dual display practice in the euro area - except in Slovenia - should be discontinued as soon as possible. Even if dual price display helps consumers in the early stages of the changeover to the euro, the practice becomes counterproductive if it continues for too long.
Continuous improvement of euro banknotes and coins
Euro banknotes and coins are the subject of continuous improvement in terms of their quality, reliability and user-friendliness. The European Central Bank started preparing the next series of banknotes shortly after the euro was brought into circulation, in order to ensure that the most up-to-date security features were used.
The number of counterfeit banknotes and coins that have been detected is very low compared with the numbers in circulation, and the European Commission emphasises that the number of counterfeit US-dollar banknotes is much higher.
Ensuring the coherence of the euro's visual aspects
National side. In 2003 the Council of the European Union imposed a moratorium until the end of 2008 on changes to the national side of euro coins intended for circulation. Exceptions to this are made when a Head of State represented on a coin changes or when commemorative 2-euro coins are issued to celebrate particular events, subject to certain constraints concerning the quantity issued and how often this is done. Commemorative coins are intended for circulation, but have a different national side. To take an example, all Member States in the euro area agreed to issue a 2-euro commemorative coin to celebrate the 50th anniversary of the signing of the Treaty of Rome on 25 March 2007.
Before the moratorium expires at the end of 2008, the Council must make a new decision as to the national sides of euro circulation coins. In 2007 the European Commission will carry out a survey among euro-area citizens in order to collect people's opinions and preferences in this respect.
As a final point, Member States are authorised to issue collectable euro coins, for example coins minted in precious metals. These coins are only legal tender in the issuing country and are not intended for circulation.
Common side. The common side of euro coins bears a map of Europe depicting the Member States of the former EU-15. Enlargement on 1 May 2004 entailed 10 new Member States joining the EU. The Council therefore decided on 7 June 2005 [PDF ] [FR] that the common sides of the 10, 20 and 50 cent coins and the 1 and 2 euro coins should be changed, so that in the future they depict all EU Member States. The smallest denominations of 1, 2 and 5 cents are not affected by this change, as they show Europe's position on a globe.
Slovenia was the first country to introduce coins with the new common side on 1 January 2007. The twelve euro-area countries which introduced euro banknotes and coins in January 2002 are currently preparing production of the new coins. Most of them are expected to switch to the current common-side design in 2007, with a few others joining them in 2008 at the latest.
Production and storage of banknotes and coins
Euro banknote production is organised on a decentralised basis with pooling, this means that the European Central Bank (ECB) allocates banknote production on an annual basis to the euro-area national central banks. Each denomination is thus produced by a limited number of printing works and each bank is responsible for providing only one or a few denominations. This increases efficiency by achieving economies of scale.
Logistical stocks and a common strategic stock of euro banknotes, the Eurosystem Strategic Stock, ensure the continuity of banknote supply. These reserves may, for example, be used to provide the initial quantity of euro banknotes necessary for the changeover in Member States joining the euro area, as was the case in Slovenia on 1 January 2007.
The ECB aims to establish a single Eurosystem tendering procedure for the procurement of banknotes, starting at the latest in 2012.
Euro coin production falls within the competence of Member States. Decisions are therefore taken on a decentralised basis, reducing the efficiency which is gained by pooling, in particular with respect to the coordination of production and/or storage of coins. For example, one country may decide to produce extra coins while another has excess stocks of the same denomination.
The Commission suggests that possible improvements should be considered, especially concerning the 1, 2 and 5 cent coins, which represent approximately 80% of new coin production. These coins generate little monetary income and the production costs and related expenditure (transport, packaging, etc.) are relatively high compared with their face value. Since the different national sides to some extent prevent the exchange and/or transfer of coin stocks between countries, some Member States may be prepared to envisage the possibility of using low denomination coins with a 'standard' national side.
Finally, the European Commission suggests that the possibility of creating a specific EU budget line for euro coinage projects and activities of common interest should be considered.
Euro used in scriptural form (1999), introduction of coins and banknotes (2002)
On 1 January 1999, the euro became the single currency of eleven Member States, followed by Greece on 1 January 2001. Between 1999 and 2001, the euro could only be used in scriptural form, for example for cheques and bank transfers. Few initially made use of this possibility and in day-to-day life the introduction of the euro as the single currency passed relatively unnoticed, as consumers in the twelve countries concerned continued to use national banknotes and coins to carry out transactions. Euro coins and banknotes were introduced into circulation in twelve Member States on 1 January 2002. Since 1 January 2007, Slovenia has been a part of the euro area.
Production and issuing of euro banknotes are the exclusive responsibility of the European Central Bank. The Member States are responsible for the production and minting of euro coins. Both euro banknotes and coins are put into circulation by the national central banks in the euro area.
For further information please visit the following European Commission websites:
- Directorate-General for Economic and Financial Affairs: the euro.
- Eurobarometer Reports: " Public opinion and the single currency ".