55 yearsyears ofof euroeuro banknotesbanknotes andand coinscoins Johan Bendz Directorate-General for Economic and Financial Affairs Unit C5: Legal and institutional questions of EMU; practical aspects of the euro TheThe EuropeanEuropean Commission’Commission’ss websitewebsite onon thethe euro:euro: Tallinn, 4.6.2007 http://ec.europa.eu/euro/entry.htmlhttp://ec.europa.eu/euro/entry.html 1 55 yearsyears ofof euroeuro banknotesbanknotes andand coinscoins Basic figures Circulation levels Euro banknotes and coins – two different systems Euro banknotes – specific issues Euro coins – specific issues Possible future developments Euro cash outside the euro area New euro countries and coins 2 EuroEuro banknotesbanknotes andand coinscoins -- basic basic figuresfigures (March(March 2007)2007) Banknotes Coins Total value in circulation (€ bio): 613.6 18.0 Total number in circulation (bio): 10.8 70.6 Total value as a share of GDP: 7.3 % 0.2 % Increase in value since Jan. 2002: 177 % 48 % Average value/capita: 1 929 € 57 € Average number/capita: 34 222 Most widely used denomination In value (share in total): € 500 (34 %) €2 (39 %) In numbers (share in total): € 50 (36 %) € 0.01 (23 %) 3 Banknotes:Banknotes: continuedcontinued increaincreasese inin circulationcirculation value,value, butbut growthgrowth ratesrates areare declining.declining. Total value of euro banknotes in circulation yearly % growth (LH scale) value billion EUR (RH scale) 60 700 50 600 500 40 400 30 300 20 200 10 100 0 0 1.1.02 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Sep-02 Dec-02 Sep-03 Dec-03 Sep-04 Dec-04 Sep-05 Dec-05 Sep-06 Dec-06 4 than forbanknotes)while growthratesaredeclining. Coins: continuedincrease incirculationvalue(butclearlyless than forbanknotes)while growthratesaredeclining. Coins: continuedincrease incirculationvalue(butclearlyless 10 15 20 0 5 1.1.02 Mar-02 Jun-02 yearly % growth (LH % scale)yearly Sep-02 Dec-02 Total value of euro coins in circulation in coins euro of value Total Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 value billion EUR (RH (RH scale) billion EUR value Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 10 12 14 16 18 20 5 Cash in circulation ('euro in USD' converted according to average monthly exchange rate) USD euro in USD euro in EUR 900 900 800 800 700 700 600 600 500 500 400 400 billion euro/USD billion 300 300 200 200 100 100 0 0 Jan-02 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sources:Sources: FederalFederal ReserveReserve StatistiStatisticalcal Release,Release, (for(for USDUSD figures).figures). CalculationsCalculations basedbased onon ECBECB andand EurostatEurostat datadata (for(for EUREUR figures).figures). 6 BanknotesBanknotes €€ 50 50 (in(in numbers)numbers) andand €€ 500 500 (in(in value)value) denominationsdenominations most widelywidely usedused Euro banknotes in circulation (March 2007) Share of each denomination in the total % 45 40 Share in number 35 Share in value 30 25 20 15 10 5 0 euro 5 euro 10 euro 20 euro 50 euro 100 euro 200 euro 500 7 CoinsCoins TheThe lowerlower thethe faceface valuevalue thethe higherhigher thethe shareshare inin numbersnumbers TheThe higherhigher thethe faceface valuevalue thethe higherhigher thethe shareshare inin totaltotal valuevalue Euro coins in circulation (March 2007) % Share of each denomination in the total 45 40 Share in number 35 Share in value 30 25 20 15 10 5 0 euro 0.01 euro 0.02 euro 0.05 euro 0.1 euro 0.2 euro 0.5 euro 1 euro 2 8 EuroEuro banknotesbanknotes andand coinscoins –– two two differentdifferent systemssystems Euro banknotes: ECB allocates a share of annual production to each national central bank (NCB), covering only some of the denominations. ECB has the exclusive right to authorise issuance. NCBs issue and put into circulation. Identical design, independently of issuing country Euro coins: Each Member State decides how much to produce and issue (subject to approval of the annual issue volume by the ECB). One common European side and one national side with country- specific national design. Regular circulation coins, commemorative coins, collector coins. 9 EuroEuro banknotesbanknotes –– specific specific issuesissues 1- and/or 2-euro banknotes Decision by ECB’s Governing Council in November 2004 not to introduce low-denomination banknotes, notably due to: insufficient demand, increased inefficiency in retail sector and vending machine industry as well as high costs of printing and processing. Second series of euro banknotes The first banknote in the new series is expected to be issued in a few years’ time. The different denominations are to be launched over a period of several years. 10 EuroEuro coinscoins –– specific specific issuesissues Moratorium on changes to the national sides Member States are only allowed to modify their national side if the Head of State depicted on a coin changes. They may also issue one commemorative circulation coin/year. Moratorium to be reviewed before expiry at the end of 2008. The new common sides Political decision by ECOFIN-Council in June 2005 to amend the common side of the five highest denominations. Member States change over (for new production) in 2007 and 2008. 11 EuroEuro coinscoins –– specific specific issuesissues NewNew commoncommon sidessides ‘Old’‘Old’ common common sidessides 12 EuroEuro coinscoins –– specific specific issuesissues The use of 1- and 2-cent coins Legal tender in all euro-area countries. However, in two countries cash payments are rounded to the nearest 5 cent, thereby limiting the use of the smallest euro coin denominations (1- and 2-cent). In Finland by national law and in the Netherlands by a voluntary, but almost universally applied, agreement. In the euro area, 58 % are satisfied with the number of denominations against 36% believing there are too many (Eurobarometer, Autumn 2006). 13 PossiblePossible futurefuture developmentsdevelopments Commission Communication of 22.12.2006 ‘Five years of euro banknotes and coins’ – policy suggestions: Review of the moratorium on changes to the national sides of euro coins – Launch of survey among euro-area population to collect information on people’s preferences. ‘Standard national’ sides for the 1-, 2- and 5-cents (For those Member States that are interested). Need for increased co-ordination of production, storage and seignorage (monetary income) in the euro coinage area? CommunicationCommunication andand attachedattached StaStaffff WorkingWorking PaperPaper areare availableavailable at:at: http://ec.europa.eu/economy_finance/eurohttp://ec.europa.eu/economy_finance/euro/notes_and_coins/notes_coins_main_en.htm/notes_and_coins/notes_coins_main_en.htm 14 DevelopmentDevelopment ofof registeredregistered netnet shipmentsshipments ofof euroeuro banknotesbanknotes toto non-euronon-euro areaarea countriescountries NET CUMULATIVE NET (EUR Millions) Total net and cumulative net euro banknote shipments (EUR Millions) 7 000 70 000 Total NET Total Cumulative NET 6 000 60 000 5 000 50 000 4 000 40 000 3 000 30 000 2 000 20 000 1 000 10 000 0 0 -1 000 -10 000 -2 000 -20 000 Jun-06 Jun-05 Jun-04 Jun-03 Jun-02 Mar-07 Mar-06 Mar-05 Mar-04 Mar-03 Mar-02 Sep-06 Dec-06 Sep-05 Dec-05 Sep-04 Dec-04 Sep-03 Dec-03 Sep-02 Dec-02 Dec-01 Source:Source: EuropeanEuropean CentralCentral BankBank 15 AdoptingAdopting thethe euroeuro National target dates for adoption of the euro Cyprus 01.01.2008 Malta Slovakia 01.01.2009 Bulgaria Czech Republic Estonia Hungary to be confirmed Latvia Lithuania Poland Romania 16 NewNew euroeuro coinscoins (when(when MaltaMalta joinsjoins thethe euroeuro area)area) TheThe MalteseMaltese coinscoins willwill showshow 33 differentdifferent imagesimages 17 NewNew euroeuro coinscoins (when(when CyprusCyprus joinsjoins thethe euroeuro area)area) TheThe CypriotCypriot coinscoins willwill showshow 33 differentdifferent imagesimages 18 NewNew euroeuro coinscoins (when(when SlovakiaSlovakia joinsjoins thethe euroeuro area)area) TheThe SlovakSlovak coinscoins willwill showshow 33 differentdifferent imagesimages 19.