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Euro landscape is changing

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By Richard Giedroyc

The Instituto Poligrafico Zecca Della Stato, or Italian State Mint, recently issued commemorative 20-euro gold coins depicting floral frescoes decorating the Villa Igiea in Palermo on the obverse, with a fresco by Ettore De Maria Bergler as it appears at the Villa Igiea, Sala Basile, on the reverse.

2euro

Italy also issued a commemorative 50-euro gold coin depicting the allegorical frieze decorating the Chamber of Deputies at Montecitorio Palace on the obverse, with reverse of a knight on horseback from another frieze.

Austria is issuing 10-euro copper and silver coins depicting the shoreline of the Hallstätter See on the obverse, with an elevated view of the Pöstlingberg Church in Linz on the reverse.

On April 11 Bavarian Finance Minister Markus Söder unveiled a ringed bimetal (tri-substance?) 5-euro coin that includes a blue plastic ring that has been dubbed the “three material coin,” the coin composition meant to deter counterfeiters. Sources indicate the Bavarian finance ministry is debating whether to implement the new design into circulating coin types.

What is missing here? First, hasn’t the European Central Bank set rules that the highest denomination coin is supposed to be the 2-euro? Second, isn’t there supposed to be a national side on each coin, with the other side reserved for European Union rather than national symbols?

Questions were recently being asked regarding if the Eurozone currency system could survive Great Britain’s exit from the European Union (Brexit). Behind the success of the Brexit vote in Great Britain is the possible Frexit (France), Germexit (Germany), Spexit (Spain), and Uscita (Italy). Where is the euro coinage going to go if any or all of these countries leave the European Union’s monetary union? Where is the euro coinage heading even if none of these countries exit the Eurozone? It doesn’t appear there is any discipline regarding the coins issued by EU countries.

There were an estimated 5.56 billion 2-euro and another 6.81 billion 1-euro coins in circulation in December 2015, according to Statista. More may be needed since there are other countries that may yet join the currency union – or are there? On June 7, the ECB published a report indicating potential currency union members Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania and Sweden have laws inconsistent with ECB standards. Several of these countries have strong political and economic opposition to joining the increasingly chaotic currency union.

According to the ECB report, “In none of the seven countries examined is the legal framework fully compatible with all the requirements for the adoption of the euro. Incompatibilities persist regarding central bank independence, in particular central banks’ institutional and financial independence, as well as personal independence.”

Perhaps the ECB should first look at what Austria, Germany and Italy are issuing before they worry about laws in non-currency union member states? The report failed to address that neither Denmark nor Great Britain, through special arrangements, are required to join the currency union despite being EU nations.

And, what about the countries that have recently stopped using the small denomination 1- and 2-cent euro coins? Belgium, Denmark, Finland, Ireland and the Netherlands adopted “Swedish rounding” in October 2015, making these two denominations obsolete in each of these nations. The German city of Kleve took the initiative and followed their example during early 2016. Finland and the Netherlands only strike these denominations for coin collector sets but none for circulation. Sweden, for whom the rounding of prices is named, rejected joining the currency union in a 2003 national referendum. Today Sweden and Denmark are each moving towards cashless economies in which electronic transfers rather than physical cash are used exclusively. Why bother to strike euro coins at all?

Physical euro coins are changing, but they are far from being consistent, as was the intention of the ECB. Who knows what will appear next in circulation?

This article was originally printed in World Coin News.
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