Estonia may drop small change from circulation
- Published: Jan 28, 2018, 6 AM
Estonia’s approximately 1.3 million residents may soon stop using the 1- and 2-cent euro coins.
Eesti Pank, the national bank of Estonia, on Jan. 17 posted at its website an announcement indicating, “It is time to talk about reducing the use of one and two-cent coins.”
The bank noted that people receive 1- and 2-cent coins as change from shops but very rarely use them when paying for goods and services.
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The bank proposed that the total transaction price of items paid by cash could be rounded to minimize the need for the coins, which would remain valid for payment but would not be given out any more from shop tills.
Opinion surveys show that 57 to 61 percent of the Estonian population are in favor of such rounding, the bank said, depending on which survey.
“Eesti Pank issues on average two truckloads a year of one and two-cent coins that shops then give out as change and that are then used very little,” according to the announcement from the bank. “The central bank believes it is worth discussing whether fewer of those coins that are very rarely used could be in circulation”, explained Madis Müller, deputy governor of Eesti Pank.
Müller said that the rounding at the till would not lead to any rise in prices as it would be done up or down mathematically and the seller cannot affect what people put in their shopping baskets and what the final price would be.
Purchases with digital payment methods would not be rounded.
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Nele Peil, general manager of the Estonian Retailers’ Association, said that rounding is in general good for retailers and for customers.
“Shop assistants will need to spend less time counting coins and on other business involving cents. Customers currently receive one and two-cent coins from shops as change, but pay with them very rarely. Low-value coins are mostly left lying around as many people find such small coins to be a nuisance. We would support a solution where the final prices for card payments at tills are not rounded, but where cash payments would be rounded mathematically, like Eesti Pank is proposing.”
Rounding in the EU
The introduction of rounding rules has not happened uniformly across the eurozone.
The European Commission recommends not introducing rounding rules in countries where there is not public support for it, according to Eesti Pank.
The five countries in the eurozone that have rounding rules for 1- and 2-cent coins are Belgium, Finland, Ireland, the Netherlands and, as of this year, Italy.
“The experience of Finland, the Netherlands, Belgium and Ireland shows that rounding did not raise prices,” the bank said. “There is more support than opposition for rounding in all five countries now.”
The next step is for Eesti Pank to collect feedback from a range of interest groups about the proposed rounding rules
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