Germany may drop one, two-cent coins

Germany might eventually decide to scrap one and two cent euro coins from circulation, in part as a cost-cutting measure, Handelsblatt…

Germany might eventually decide to scrap one and two cent euro coins from circulation, in part as a cost-cutting measure, Handelsblattreported.

The financial daily quoted Mr Wolfgang Soeffner, the Bundesbank's head of circulation, as saying: "We could imagine a solution of this kind for Germany".

Germany could follow the lead of Finland, which has already rounded up or down all retail prices to the nearest five cents, thereby removing one and two cent pieces from the equation, the newspaper added.

The smallest two coin denominations now cost more to produce and transport than their nominal value, following recent sharp rises in the price of steel.

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German retailing Association HDE told the newspaper it is against the proposal because it would revive the "teuro" debate.

Germans christened the euro "teuro" - which means expensive - when it replaced the Deutsche mark because of the widespread perception that the country's retailers took advantage of the currency switch to round prices up rather than down.