Slovakia pushing for €1 banknote from 2009
RENATA GOLDIROVA
03.05.2007 @ 09:26 CET
EUOBSERVER / BRUSSELS – Aiming to change its national currency to the euro in 2009, Slovakia has revived old ideas on issuing €1 and €2 banknotes, but the European Central Bank says the idea won't fly.
"We are trying to open up debate," Slovak prime minister Robert Fico said in an April meeting with the European Central Bank president Jean-Claude Trichet, underlining the move was driven by public dismay.
"The banknote – unlike the coin - is a subjective symbol of value," Mr Fico argued. He was referring to the fact that in his country a €1 coin may replace two banknotes of 20 and 50 Slovak koruna, which could eventually lead to the feeling of having less money.
In fellow new EU state Slovenia, adoption of the euro has already made people feel poorer, after the country bid farewell to its national currency in January 2007. The €1 coin has a value of 254 Slovenian tolars, something that has prompted a citizens' petition.
The public initiative – signed by over 2,700 people so far – urges the European Central Bank to "start an immediate procedure for the issuing of €1 and €2 banknotes". However, the Slovenian government has not backed the idea.
A European Central Bank spokesperson told EUobserver that any such demand – whether made by an EU member state or the public – is likely to be turned down, as the negative consequences of introducing very low denomination banknotes outweigh positive ones.
According to the Frankfurt-based institution, the retail sector and the vending machine industry would be affected, while the high costs of printing and processing of new banknotes also make the idea unattractive.
"Our position was indirectly proved right when the US decided to stop printing $1 bills and substitute them with coins," the bank's spokesperson added.
The last time the bank's governing council along with EU finance ministers officially weighed up the pros and cons of having lower denomination euro banknotes was in November 2004, following pressure from Athens and Rome.
"The Greeks tend not to treat coins based on their real value," the spokesperson for Greece's permanent representation to Brussels told EUobserver, pointing out that the €1 coin replaced approximately 340 drachmas in 2001.
But in general, 58 percent of people coming from the eurozone are satisfied with the current selection of values of euro coins, according to a Eurobarometer survey from 2006. Thirty six percent say there are too many coins of different values, with Italy, Belgium, Luxembourg and Ireland complaining the most.
According to Slovakia's envoy for euro-adoption, Igor Barat "the citizens' concerns related to change-over from banknotes to coins will be addressed in an information campaign."
"Those concerns will also be [used as] an additional argument to promote non-cash payment," he added.