Giscard d'Estaing re-issues call for a €1 note to replace coins in EU wallets - La Treizième Étoile: A blog on EU politics
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Giscard d'Estaing re-issues call for a €1 note to replace coins in EU wallets

Tuesday, 26 January 2010
Louis Giscard d'Estaing, a French Member of Parliament from Nicolas Sarkozy's governing UMP party, has re-launched the call for the European Central Bank (ECB) to create a €1 bank note, which would mirror the pattern of notes for the US Dollar.

The Money Shot (Photo: genefilter/Flickr)Mr Giscard d'Estaing, the son of former French president Valéry, has already set up a French interparliamentary group on the matter and thinks that such a bank note would give European citizens "the symbolic and practical proof that the European currency is best for them."

"The smallest denomination of Euro note is the five Euro, and that is some eight dollars," he argues, restating his belief that the creation of a new €1 note is necessary to replicate the success of the $1 bill.

The MP, below left, who is also the current Mayor of the commune of Chamalières, where the Bank of France's print house - which, if ever agreed, would print the new notes for France - are conveniently housed, also points to the fact that coins are not accepted at the bureaux de change and as a result this "penalises travellers in the Eurozone."

Louis Giscard d'Estaing sat in the French Assemblée NationaleJean-Pierre Audy, a French MEP, is quoted by EuActif.fr adding that "the €1 note will be very useful in the new Member States such as the Czech Republic, Lithuania, Poland, and Hungary" - although he did not precise why - presumably to aid currency conversion for their future changeovers to the Euro.

But perhaps that is not why, since the only country this would advantage is the largely Eurosceptic Czech Republic, who had been planned a switchover for 2012, but suspended that plan in 2007 amongst considerable public and political opposition.

If the changeover ever happened there, the €1 note would convert to 25 Korun* - which is not a note denomination as the lowest note is 50CZK.

In Lithuania, where the Euro is planned to be adopted shortly, the value of the outgoing currency has been pegged, so always equals 3.45 Litas*, which is also not a denomination of bank note.

In Poland, it would equal 4 Złotych* (lowest note is worth 10 złotych), and then in Hungary where entry into the Eurozone is a long-term goal, it would be worth 275 Forint*, so would have to be changed using a minimum of four coins: a 200, a 50, a 20 and a 5 Ft as the lowest note carries the number 500...

Besides the Czech Republic, the €1 note doesn't present many benefits for these countries in future conversions so there must be another reason. Another French MEP, Jean-Paul Gauzès, says that the new note's value would be symbolic, as "it would be a way of showing the value of the Euro as is our minds it is just another coin."

But taking those examples, the €1 coin would require at least a couple of the original currency coins to convert into anyway as no note corresponds exactly, so where is the benefit of the €1 note apart from trying to establish the same notoriety as the US 'Washington'?

It may therefore come as a surprise to learn that this is not the first time that such a novel idea has been proposed. Italy, Greece, Austria and Slovenia have each asked several times in the past to introduce lower denominations of Euro notes.

ECB in Frankfurt (Photo: De Welt)The European Central Bank which ultimately has the mandate over this has stated that "printing a €1 note is more expensive (and less durable) than minting a €1 coin" and on the 18th November 2004 it decided definitively that there was insufficient demand across the Eurozone for very low denomination banknotes.

However in October 2005, more than half of the MEPs supported a motion calling on the European Commission and the ECB to recognise the need for the introduction of €1 and €2 banknotes.

But because the ECB is not directly answerable to the Parliament or the Commission, it has been able to completely ignore the motion and further calls such as this one - which it has with much success.

So for now, and until some real concrete economic and social reasons are found, the €1 coin will stay - and quite rightly too.

* currency conversions provided by xe.com/ucc and although are subject to natural fluctuations were correct at time of publishing.

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