Irish soon to be penniless

By Richard Giedroyc

Ireland hopes to follow the example of several other European Union currency union members by ceasing production of its 1- and 2-cent coins.

The recommendation made June 14 by Ireland Minister for Finance Michael Noonan to the Irish cabinet follows recommendations in a recent report from Ireland’s central bank’s National Payments Plan coupled with the results of a 2013 nine-week experiment conducted in Wexford.

Fine Gael Senator Catherine Noone has been hawkish about removing the 1- and 2-cent coins for some time. In early June Noone said, “Ireland has been minting coppers at three times the rate of the EU average and yet there is a consistent shortage of them across the country. This is causing consistent problems for businesses when it comes to change shortages and is a hassle shared by businesses and consumers alike. It seems senseless that we are bending over backwards to produce these coins given the cost of production costs more than their stored value, with a cent coin costing 1.7 cent to produce and a 2-cent coin costing about 2 cents.”

The Wexford “project” was conducted between Sept. 17 and Nov. 17, 2013, as a pilot project to observe how commerce would be viewed by merchants and consumers if the two coin denominations had already been withdrawn.

At that time National Payments Plan spokesman Ronnie O’Toole said, “People said they couldn’t use them [1- and 2-cent coins] any more to buy anything or use them in [vending] machines so what people do is that they take them out of their wallet or purse and put them in a jam jar. As a result we have had to replace those coins going out of circulation - we have issued over 30 million euro worth of 1- and 2-cent coins since the euro was introduced in 2001. In fact our issuing of replacement 1-cent and 2-cent coins accounts for 85 percent of all coin production for the central bank at the mint in Sandyford.”

Wexford Chamber of Commerce Chief Executive Officer Madeleine Quirke said of the project, “Some 250 businesses in Wexford participated in the project – everyone from supermarkets to pubs to fast food outlets to garages – anyone handling large amounts of cash. Some 85 percent of consumers and 100 percent of business owners surveyed were in favor of the project, in fact we have had no complaints or negative comments at all.”

Quirke continued, “It was stipulated clearly by the central bank when Wexford was chosen that there would be no increase in prices and businesses here adhered to that faithfully. Prices remained the same - items were still carrying the same price tags and it was only the total bill at the end of the transaction that was rounded up or down to the nearest 5-cent. Consumers were very happy to support the project once it wasn’t hitting them in their pocket while it cut down on the time that business people had to spend dealing with coin.”

Of course, there is no guarantee merchants will continue to round prices down rather than up exclusively once the change in their change becomes permanent. Even if Ireland stops producing 1- and 2-cent euro coins the nation must still allow the coins to continue to be treated as legal tender as are they elsewhere in the EU.

If O’ Toole’s statement is true that the hoarding of the two coin denominations has created a coin shortage that commits much of the mint’s production time, then how can it be that the two denominations aren’t being used very much? Should it be found people are still using the denominations, shouldn’t Ireland’s lack of producing them put a strain on the supply of these coins available in other EU currency union nations?

• Start becoming a coin collector today with this popular course, Coin Collecting 101.