The five stays but the one goes

The five-centime coin will continue in circulation Keystone

The government has decided not to scrap the gold-coloured five-centime coin ($0.038), giving in to pressure from a strong lobby in favour of retaining it.

However, the one-centime coin is to disappear. The cabinet said it was no longer used for payments and its value was only symbolic.

Finance minister Hans-Rudolf Merz had already said in the media in February that he was not in favour of withdrawing the five-centime coin from circulation.

Consumers’ organisations, in particular, had raised objections arguing that shopkeepers would round up their prices if the five-centime coin were to be ditched.

They said the measure would also push up prices for postage stamps and fuel inflation.

The finance ministry put forward a plan in October to withdraw the two smallest coins from circulation in a bid to save about SFr300,000 ($230,500) in costs.

Savings elsewhere

In a statement on Wednesday, it said these costs could be saved elsewhere at the Official Mint of the Swiss Confederation, now called swissmint.

The argument for scrapping the coin centred on its production costs, which are higher than its actual value.

Another headache for swissmint is that the coin is often handed out as change but rarely used for payment, which means they are hoarded in piggy banks and in drawers, effectively withdrawing them from circulation, obliging the mint to produce more.

It is also not accepted by vending machines, public telephones, parking meters or washing machines, and frowned upon as tips by waiters and taxi drivers.

Logic

In 2003, for example, almost a third of the 32 million coins minted were five-centime pieces, causing some officials to scratch their heads about the logic of producing something that costs more than it was worth.

On the flip side of the coin, there was no opposition to abandoning the one-centime piece, apart from coin enthusiasts who were keen to retain it for its emotional value.

But the finance ministry statement said each coin cost 11 centimes to produce and there were increasing difficulties in finding the right metal to mint it.

It is to be officially pulled out of circulation from January 1, 2007 but people will still have the opportunity to change them at their official value at the Swiss National Bank, the Swiss Federal Railways and at Swiss Post.

The government last withdrew a coin from circulation – the two-centime piece – in 1978.

swissinfo with agencies

In brief

Before 1850, about 75 groups were making coins in Switzerland, including the 25 cantons, 16 cities and abbeys. The result was there were about 860 different coins in circulation, with different values and denominations.

Less than 15% of the money in circulation in Switzerland in 1850 was local, with the rest being foreign money, mainly brought back by mercenaries.

Some private banks also started issuing the first banknotes, so that in total, at least 8000 different coins and notes were in circulation at that time, making the monetary system extremely complicated.

In order to solve this problem, the Swiss federal constitution of 1848 stated that the government would be the only entity allowed to make money in Switzerland.

The first federal coinage act, passed by the federal assembly in 1850, introduced the franc as the monetary unit of Switzerland.

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.
The one-centime coin has a weight of 1.5 g, while the five-centime coin is slightly heavier at 1.8 g.