Monday

23rd Jan 2017

Commission frowns on shop signs that say: '€500 notes not accepted'

  • Retailers should not avoid big euro banknotes as a matter of practice (Photo: 1suisse)

The European Commission has frowned upon the practice of shops that put up signs saying that they do not accept €200 or €500 bank notes.

At the other end of the scale, machines such as parking meters and bus ticket dispensers that do not accept one- and two-cent euro coins, or rules that require all prices to be rounded up to the nearest five cents are also not in keeping with the spirit of the whole euro project.

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According to a commission recommendation issued on Monday (22 March), retailers should not be allowed to put up signs banning the use of high-value banknotes. Refusal to accept these bills is fine from time to time if a shopowner is out of change at a given moment, but this should not be a permanent rule, the commission has said.

Finding the tiny one- and two-cent coins more trouble than they are worth, Finland and the Netherlands have adopted rules rounding up prices to the nearest five cents, but Brussels says states should refrain from further such rules and stressed the right to use one- and two-cent coins.

Given their low value, most automatic payment options, for instance in parking lots, public transportation or food automats, frequently do not allow payments with one and two cent coins.

In adopting the recommendation, the commission said it was only a series of guidelines on the use of notes and coins, but if the European capital is not satisfied with the way they are being applied by member states, the guidelines could become rules.

The guidelines are "soft law", meaning non-binding regulations, but mandatory option could be taken in three years, when the commission will evaluate the way the new principles are being implemented.

The status of the legal tender of euro banknotes and coins was laid down by EU law when the euro was adopted in 2002, but implementation of the law still varies due to different legal traditions in the 16 eurozone countries.

So far, Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain have adopted the single currency. Estonia is likely to join in January 2011.

"This recommendation brings practical benefits for European citizens in their everyday life. It is a matter of consumer rights that payments in cash should, as a rule, be always accepted in shops," EU monetary affairs commissioner Olli Rehn said in a press statement.

The commission also warned that retailers should not impose surcharges on the use of cash instead of credit cards, a rather unusual option that to this date has not actually been imposed by any shops, but the possibility of doing so does exist in theory and Brussels wants to stamp out the idea before it materialises.

According to commission experts, such a possibility exists in some member states where national laws applying the EU rules allow retailers to charge extra on certain means of payments but do not explicitly prohibit surcharging cash payments.

Additionally, using coins and banknotes for artistic purposes "should be tolerated", the commission says, and individuals should also be permitted to destroy banknotes and coins "in small quantities."

This reflects a tension between two schools of thought – more liberal countries consider the bearer and owner of the banknote free to do what ever he wants with his own good, while in a few member states the banknote is considered a public good and intentionally damaging such an item could be sanctioned.

As to national authorities, they should no longer be allowed to decide "in isolation" whether to destroy coins and banknotes that may still be useable without notifying the European bodies dealing with monetary issues.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

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