The eurozone should get rid of the 1 and 2 cent coins
Many countries in Europe currently have the Euro. At the moment there are coins of 1 and 2 cent in circulation. Some people believe we should get rid of them. This debate will be about that question.
I as pro am going to argue that we should get rid of the 1 and 2 cent coins. I have the burden of proof, because I'm challenging the status quo.
The participants have 72 hours to write their posts and the character limit is 8.000.
Eurozone: A geographic and economic region that consists of all the European Union countries that have fully incorporated the euro as their national currency (1).
1. No forfeits
Round 1: acceptance (no arguments)
I’d like to thank con in advance for participating in this debate and wish him skill.
I thank Rami for accepting the debate.
Since I have the burden of proof I have to proof two things:
1. The benefits of getting rid of the 1 and 2 cent coins are bigger than the harms
Benefits > harm
I’m first going to show with multiple arguments what the benefits are of getting rid of the 1 and 2 cent coins.
Argument 1: 1 and 2 cent coins are pretty useless
At the moment the typical journey of a 1 or 2 cent coin looks like this:
Argument 2: the cost of producing coins
It costs 1.65 cents to produce a 1 cent coin and 1.94 cents to produce a 2 cent coin (2). Since there are about 25 billion 1 and 2 cent coins in circulation (1), the total cost of producing them all was about €400 million (1). That €400 million could be spent on other things. To give an example, you could buy a Boeing 747-8 for $357 million (6) and still have more than €85 million left when using the exchange rates of $1 = €0.88207, which was the exchange rate when I wrote this (3). But the cost of producing coins is only one part of the costs. This brings me to the second part I’ll discuss:
Argument 3: giving the 1 and 2 cents back as change is not worth the time
When you buy something, you get change, but the proces of giving change takes time. Let’s say it takes on average 5 extra seconds for the cashier to grab the 1 and 2 cent coins, count them, give them to the customer and for the customer to put them inside his (or her) wallet. Occasionally a customer or cashier will accidentally drop some coins, which also consumes some time. This is included in the 5 seconds.
But whose time is used? The time of the cashier, the time of the customer who receives the change and the time of the customers waiting in the line. Let’s say that on average one more customer is waiting in the line. So 3 people are all spending 5 seconds. But what is the price of time? Let’s use the minimum wage in Germany, which is €8.50 per hour (4). So the cost of giving back the 1 and 2 cent coins is: 3 people * 5 seconds * €8.50 per hour = €0.0354 per transaction. So the cost of time of giving back the 1 and 2 cents is bigger than the value of the money.
But this is the cost of a single transaction. Let’s look at how many transactions there are in Europe. Europe has a population of 338.335.120 (5). I estimate an average person makes 60 transactions per year in which the change includes 1 or 2 cents. Therefore I estimate there are 20.3 billion transactions, which each cost €0.0354. So the total cost is roughly €719 million. That’s enough to buy two more Boeing 747-8s and still have €89 million left.
Implementing is doable
I’ll start with explaining how the financial system will work without the 1 and 2 cent coins. After that I’m going to prove the plan is really doable.
The new system
Without the 1 and 2 cent coins all cash transactions will get rounded to the nearest 5 cents. However, not every single item gets rounded to the nearest 5 cents. Only the total you’ll have to pay at the cash register gets rounded.
Evidence: multiple countries already did it
Belgium, Denmark, The Netherlands, Sweden, Finland and Hungary already decided to get rid of the 1 and 2 cent coins (7). Ireland will get rid of them very soon (2). This shows it’s very well doable to implement the system.
With this I end my argumentation. I now hand the debate to con.
I'm reasonably sure that taxes vary around the Eurozone. I'm not going to use a number I know that is the Eurozone taxes. Let's just say 7%. 7% on a Euro would require one or two cent coins to pay, if you aren't paying online. This may not sound like a lot, but with everyone missing a few cents, numbers can get big. This wouldn't be a problem easily solved. Changing the taxes isn't the easiest thing, but I'm going to focus on the impossibly of getting taxes to a number where we don't need to use one or two cent coins. The fact is, only if you raise taxes to 100% will you ensure that there won't be any need for 1 or 2 cent coins. Otherwise, you'd have to start meddling with how much people are paid.
In summary, one of these outcomes are required:
1. Everyone has to pay online for taxes.
2. The governments of Europe are going to have a much lower budget.
3. Taxes are 100%
4. There are requirements for how much someone can be paid.
I again would like to thank Pro for this debate. I hope he responds soon, because I am itching to rebut some of his arguments.
Position: the eurozone should get rid of the 1 and 2 cent coins
I thank con for his quick response. In this round I'm going to rebut the argument he gave last round.
It seems like con has the idea that the prices including taxes themselves have to be a multiple of 5 cents, but that is not the case. The prices are still allowed to end on any number. After that the total gets rounded. The image below shows how this rounding works. (Please replace the $ signs with € signs in your head)
To give an example:
As the example shows, the total including taxes is €4.92, which got rounded to €4.90 when the customer decided to pay with cash.
But wait, the shop just missed 2 cents in revenue from this customer. That's right, but when the bill including taxes of the next customer is €4.93 it gets rounded to €4.95. So the shop earns an extra 2 cents in revenue. In the long term these little advantages and disadvantages tend to cancel out, so the shop isn't gaining extra revenue or losing revenue.
I now hand the debate back to con, so he can rebut my arguments.
A1, A2, A3:
I am going to rebut this case with another argument Pro has put: A2: the cost of producing coins. Sure, if you don't keep them, pennies are useless. However, if we are going to be super miserly, saving up pennies for years will eventually get to some big amount of money. You can choose one of these arguments. Also, the third argument would be good if people were incredibly exact about time. The thing here is that some people aren't. There are misers and there are people who don't care. This would argument only appeals to some.
The new system:
Well, it comes down to this: Some people would see this as a great opportunity to save money. If the price would be rounded up, you'd pay online. If it's going to be rounded down, pay in cash. I'm not so sure how many people would do this, but with 742 million people in Europe , there's bound to be a significant amount of people who do this, leading to a lower national budget (or one of the other cases I mentioned in the previous round).
I thank Pro for making this round easier for me by choosing examples of countries that are on a decline in national budget , furthering my proof that getting rid of the one and two cent coins lowers the budget. The only country that isn't on the decline is Denmark . So, is it doable? Yes. Will it lower the budget? Yes. I now pass the debate mike to Pro.
I thank con for his rebuttals. In this round I'm going to defend against his rebuttals to show that we should really get rid of the 1 and 2 cent coins.
Con said that if we keep the cents you'll eventually end up with a big amount of money. However, you are barely able to spend those cents for two reasons:
1. Paying with a big pile of cents isn't very polite
Let's imagine you go to a café and order some drinks. The bill is €10,-. You decide to pay it all with the 1 and 2 cent coins you have been saving for quite some time. So you will pay with at least 500 and at most 1000 coins. Now imagine the face of the cashier who realizes he (or she) has to count all those coins. After you're done with that, imagine the faces of the people who are standing behind you in line. They will have to wait for quite some time.
2. You can get sued
In the UK a man tried to pay £804 with mostly 1 and 2 cent coins. He got sued and had to pay £ 1,118.62 (1). According to the Coinage Act 1971 you're only allowed to pay with 1 and 2 cent coins if the total bill is 20 cents or less (1). But this debate is about the eurozone and not the UK. In the eurozone there's a similar law. People are only allowed to pay with up to 50 coins in a single payment (2).
After that con tries to rebut my third argument by saying that many people aren't exact about time. It's right that some people don't care a lot about time. However, all people have one thing in common: people who spend time waiting in line or accepting change aren't doing something else. That time could be spent on other things. To give some examples, you could spend that time with your children, exercise a little or go on a date. Those are some of the most common regrets (3).
Con also said that people will pay cash if the price gets rounded down and electronically if the price would get rounded up. Some people will probably do this, but I doubt this will have a big impact on the national budget. After all you can only save at most 2 cents with a single transaction. Only a small portion of those 2 cents is sales tax. Meanwhile the government also saves €400 million by not producing the 1 and 2 cent coins (argument 2, round 2). So unless the 338 million people who live in the eurozone (source 5, round 2) manage to bring the sales tax down by more than €400 million, the savings of governments get are bigger than the drop in sales tax.
Con tries to prove this by showing that of 5 of the 6 countries I mentioned the deficit grew. However, correlation isn't causation. The government deficit can be caused by hundreds of reasons. One of many examples is baby boomers retiring, which leads to less income tax and since many governments support the elderly, more expenses.
I will now hand the debate back to con, so he can write the last part of this debate.
2) http://eur-lex.europa.eu... article 11