Italy will no longer mint 1- and 2-cent euro coins from 2018, a parliamentary committee decided at the weekend.

The move means all prices in Italy will be rounded to the nearest 5 cents.

Italians were receiving the small copper coins as change but were not spending them, claimed Sergio Boccadutri, the member of the ruling center-left Democratic Party who proposed the measure.

The coins are not accepted by parking meters, vending machines or toll booths, he told national business daily Il Sole 24 Ore. He said they were often left in drawers at home, abandoned in car doors or left at the supermarket checkouts to avoid cluttering pockets.

"In short, it is a production loss, because they cost more than they are worth," he told the newspaper.

From cotton to cash: how to (actually) make a euro From fluffy cotton to cold hard cash Cotton is the euro banknote's base material. It handles stress better than the traditionally-used paper, which allows the bills to survive an accidental trip through the laundry machine. The textile industry sorts the cotton out into short threads before sending it off.

From cotton to cash: how to (actually) make a euro Secret recipe The cotton is then bleached, washed and prepared into a pulp - whose exact formula is kept secret. A cylinder mould paper machine then turns the pulp into long strips of paper. By this point, the bills-to-be already contain a number of security features, such as watermarks and security threads.

From cotton to cash: how to (actually) make a euro Taking on the forgers... The developers of the euro banknotes thought up more than ten different security features to make life tough for forgers. One involves a foil application, which is pressed onto the bill here in Germany at the private printers Giesecke & Devrient.

From cotton to cash: how to (actually) make a euro ...while still geting took Despite the elaborate printing procedure, counterfeiters still manage to bring hundreds of thousands of fake bills into circulation. Last year, more counterfeit euros were seized than in any year since the common currency's introduction in 2002. The ECB counts about 900,000 faked euro banknotes worldwide.

From cotton to cash: how to (actually) make a euro The artist (whose work you may own) Reinhold Gerstetter is responsible for the design of the euro banknotes. Fans of the old Deutsche Mark may recognize his work - he drew the faces on their last edition, before Germany switched to the euro. Each bills is assigned an architectural epoch in European history, according to value, from an ancient archway on the five-euro-note to a steel bridge on the five-hundred-euro bill.

From cotton to cash: how to (actually) make a euro Each and every note is unique Each bill gets stamped with a unique number, which shows at which of the dozen high-security printers in Europe it was printed. The notes are then distributed among the different euro member states according to a determined ratio.

From cotton to cash: how to (actually) make a euro The true cost of 500 euros The stacks of cash are bundled, shrink-wrapped and then sent to the central banks of member nations. A banknote costs between seven and 16 cents to produce, increasing with the value of the bill as they grow larger and more packed with more security features.

From cotton to cash: how to (actually) make a euro Cutting costs Earlier, nations automatically commissioned their own domestic banknote producers. Now, Germany's Bundesbank for instance is open to giving assignments beyond its own borders. The competition creates cost pressure. Last year, the German printer Giesecke Devrient closed their location in Munich and laid off around 700 employees, as production is cheaper at its Leipzig and Malaysia shops.

From cotton to cash: how to (actually) make a euro In with the new! In 2013, the five-euro-bill became the first of the newer, safer banknotes to be introduced. The 10-euro-note then entered circulation in 2015, followed by the 20-euro-note the year after. The new 50-year note is expected to make its appearance next year, with the 100- and 200-euro-notes coming in 2018. A new 500-euro-note is planned for 2019, but is expected to get nixed before then. Author: Hilke Fischer



Since the euro was introduced in 2004, Italy has spent millions on manufacturing the coins, whose inside is made of iron and whose outside is copper.

In Belgium, Finland, the Netherlands and Ireland, prices are often rounded to the nearest multiple of 5 cents to avoid using the smaller denominations, though they remain legal tender.

Germany keeps the change

Other European Union countries, including Germany, have also considered scrapping the 1- and 2-cent coins, but decided against it.

In 2013 the European Commission reported that the difference between production costs for the small coins and their face value since their introduction had grown to more than 1.4 billion euros (US $1.8 billion at the time).

Stefan Hertel, press spokesman for the German trade association HDE, told Deutsche Welle at the time, "There are relevant surveys, including from the German Central Bank, that show that a huge majority of consumers like the 1- and 2-cent coins and want to keep them."

In Germany an estimated 79 percent of all transactions are conducted in cash.

German retailers also wanted to keep the coins, if only to continue the trend of so-called psychological pricing (sometimes called charm pricing) - for instance, when a product is listed at 9.99 euros rather than the full 10.

Last year the Governing Council of the European Central Bank decided that it would phase out the 500-euro note to curb terrorist financing and money laundering. It became the first and only euro denomination to be discontinued since the euro's introduction.