Euro coins

Legal framework

 

The coinage prerogative

Even after the introduction of the euro, responsibility for the coin prerogative still lies with the competent national authorities; in Germany this is the Federal Ministry of Finance. The Bundesbank, for its part, is entrusted with the task of ensuring that a sufficient range of payment mediums are available to support the execution of payments.

The coinage prerogative itself does not refer to any denominations in particular, but rather to all of the coins issued in Germany. Up until 31 December 2001, the nominal value of the coins was laid down in section 1 of the Coinage Act (Münzgesetz 1950). Up until December 1986, the upper limit of the nominal values was fixed at DM5, following that, coins with a nominal value of DM10 could also be minted. Use was made of this option from 1987 onwards when the first DM10 commemorative coins were issued.

Section 1 of the Coinage Act of 2008 refers to Council Regulation (EC) No 975/98 of 3 May 1998 on denominations and technical specifications of euro coins intended for circulation, as last amended. In addition to the technical details, this act sets the nominal values for European coins intended for circulation (1 cent to €2 coins).

The nominal values of commemorative coins, however, are not governed by this act. These values are determined autonomously for each individual issue by the trustee of the respective coinage prerogative. In Germany, this function is carried out by the Federal Ministry of Finance pursuant to section 5 of the Coinage Act of 2008. It is therefore possible to issue silver commemorative coins with a nominal value of €10 as well as gold commemorative coins (nominal value in 2002: €100 and €200, and as of 2003: €100).

History

Prior to the establishment of the ECB and the transfer of monetary policy decision-making powers on 1 January 1999, each commemorative coin series which the Federal Ministry of Finance intended to issue, as well as the regular annual minting volumes, had to be authorised by the Bundesbank’s Central Bank Council. This prevented excessive volumes of coins being minted with the intention of generating additional income from seigniorage and also prevented the uncontrolled growth of the money stock, which, however, is negligible in relation to the total volume. Once the total volume had been approved, a corresponding order was placed with the mints. The mints then delivered the commemorative coins to the Bundesbank’s branches, where they were kept in safe custody until the date of issue. On the date of issue, the total nominal value of the coins was booked and credited to the Federal Ministry of Finance. Commemorative coins which cannot be sold are occasionally redeemed by the Federal Government with the nominal value being redeemed to its account.

In preparation for monetary union, lending by central banks to government bodies was prohibited (Article 101 (1) of the EC Treaty). This also includes the unrestricted crediting of central bank coin holdings. On the basis of this provision, all of the Bundesbank’s coin holdings which exceed 10% of the current volume of coins in circulation are redebited to the Federal Ministry of Finance. This is in line with Council Regulation (EC) No 3603/93, which compliments the provisions of Articles 101 and 102 of the EC Treaty. The holdings are recredited as soon as they fall below this threshold.

The coin sector - responsibility of state governments and European coordination

Since 1999, the annual issue volumes of the individual euro-area member states have to be authorised by the ECB. In this context, the ECB fixes a global amount which the individual states can then use for both regular issue coins and commemorative coins.

Since responsibility for the coin sector still lies with the state governments and is merely coordinated across Europe, all coins are minted and brought into circulation, as previously, by the commissioned national authorities of the individual states. Whereas regular issue coins, despite their varying national sides, are valid as legal tender in all euro-area member states, commemorative coins issued by individual states have to be accepted for payment purposes in the country of issue only. This point is clearly specified by the provision in the Coinage Act which states that German collector’s coins are valid as legal tender in Germany only (section 2 (2) of the Coinage Act of 2008).

In addition to this regional restriction on the acceptance of commemorative coins, there are also general provisions which govern the general obligation to accept coins for payment purposes. Council Regulation (EC) No 974/98 of 3 May 1998 stipulates that no party other than the issuing authority and persons specifically named in national legislation is obliged to accept more than 50 coins in any single payment transaction. The regulation does not specify a value and it applies to all participating countries.

The Coinage Act of 2008 supplements this provision with respect to German commemorative coins and also defines the persons to be named (section 3 (1) and (2) of the Coinage Act of 2008). The obligation to accept German commemorative coins denominated in euro is limited to €200 per payment. In addition, the acceptance limit of a maximum of 50 coins also applies to single payments in both regular issue euro coins and commemorative coins (section 3 (1)). In section 3 (2), the Bundesbank is required to accept as payment mediums an unlimited number of euro coins and German euro-denominated commemorative coins, regardless of the sum, or to replace these coins with other legal tender.

The national responsibility is also reflected in the design of euro coins. Whereas the value side of euro regular issue coins, which was designed by the Belgian artist Luc Luycx, has the same motif in all the euro-area member states, the responsible body for coinage in each participating country has its own design on the reverse side of the coins. Generally speaking, the participating countries are allowed to change the design of the national side. This is of particular significance for countries which have chosen to feature the country's head of state on the coins. If the head of state of a country abdicates, these countries are free to change the motif on the national side of their coins. The new motifs simply have to be announced to the respective national authorities and published in the Official Journal of the European Union. The Council of the European Union has, however, imposed a moratorium until the end of 2008 on changes to the national side of euro coins. This is intended to keep the number of different designs constant for the time being. In accordance with section 4 (2) of the German Coinage Act, the design of the national side of German euro coins must be announced in the Federal Law Gazette.

The national responsibility is also reflected in the design of euro coins. Whereas the value side of euro regular issue coins, which was designed by the Belgian artist Luc Luycx, has the same motif in all the euro-area member states, the body with responsibility for the coinage in each participating country has the right to determine the design on the reverse side of the coins. Generally speaking, the participating countries are allowed to change the design of the national side. This is of particular significance for countries which have chosen to feature the country's head of state on their coins. If the head of state abdicates, the country in question is then free to change the motif on the national side of its coins. The new motifs simply have to be announced to the respective national authorities and published in the Official Journal of the European Union. Furthermore, the participating countries are subject to a moratorium which prohibits any changes to the national side of euro coins. This is intended to keep the number of different designs constant for the time being. In accordance with section 4 (2) of the German Coinage Act, the design of the national side of German euro coins must be announced in the Federal Law Gazette.

Downloads

• Coinage Act (german only)

 

Contact informationen

The Federal Ministry of Finance is the responsible authority for all policy questions relating to coinage and to the design of the individual coins. If you have any questions, please contact the Federal Ministry of Finance.