Small change is creating big opposition

For some people it makes sense to keep their cents Keystone

The Swiss authorities are facing increasing opposition against the abolition of the five- and one-centime pieces.

Consumer groups are concerned about an impact on inflation. The coins are no longer considered very useful and they are hoarded or serve as “lucky charms”.

The finance ministry in October put forward a plan to withdraw the two smallest coins of the Swiss currency in a bid to save SFr300,000 ($228,720).

It said the coins were no longer used very often by consumers and had merely symbolic value as “good luck” charms or for commercial campaigns.

Swissmint, the office in charge of minting the coins on behalf of the state argued that production costs were higher than the purchasing power of the money.

The five-centime coin is currently worth about 3.8 United States cents.

Inflation

But after a regular three-month consultation procedure involving political parties and other groups, opposition against the plan appears to be gathering pace.

The country’s leading consumer organisations said the withdrawal of the coins would fuel inflation, and notably push up prices for postage stamps.

Even a 0.2 per cent increase on prices was not to be underestimated said Nadia Thiongane of the consumer federation in western Switzerland.

Retailers and the Association of Small- and Medium Sized Enterprises have dismissed the fears as unfounded but they argue that the costs of adapting the system would exceed the benefits and eat further into profit margins.

The Swiss Business Federation, economiesuisse, champions the end of the five-centime piece. But it cautioned that it should not lead to price hikes for consumers and called for a longer transition period.

The federal authorities had planned to take the coins out of circulation by 2008.

Cheaper

Several groups, including the centre-right Christian Democratic Party, called on the government to consider cheaper ways of production, including outsourcing to a foreign mint.

Coin enthusiasts argued that the small coins had an emotional value for many people, adding that Switzerland would be the only modern state to stop minting the smallest coins.

There are an estimated 785 million five-centime pieces in circulation, but many of them end up in children’s piggy banks or somehow disappear.

Officials say people hoard the coins at home, forcing Swissmint to produce new ones.

The government still has to rule on the withdrawal of the coins. In 1978 it took the two-centime out of circulation.

The European Union is also considering the end of the one- and two-cent coins. Finland is not been minting the coins since the euro was introduced in 2002.

Although prices are quoted to the exact cent, the final amount when paying is rounded off.

swissinfo with agencies

Key facts

The current five-centime coin, which has a golden finish, was introduced in the summer of 1981.
There are an estimated 785 million five-centime coins in circulation.
Statistics say that one in five Swiss coins in circulation is a five-centime piece.