BETA


2023/0208(COD) Legal tender of euro banknotes and coins

Progress: Awaiting committee decision

RoleCommitteeRapporteurShadows
Lead ECON BERGER Stefan (icon: EPP EPP) TANG Paul (icon: S&D S&D), BOYER Gilles (icon: Renew Renew), HAHN Henrike (icon: Verts/ALE Verts/ALE), BECK Gunnar (icon: ID ID), HOOGEVEEN Michiel (icon: ECR ECR), MACMANUS Chris (icon: GUE/NGL GUE/NGL)
Committee Opinion JURI
Lead committee dossier:
Legal Basis:
TFEU 133

Events

2024/01/29
   EP - Amendments tabled in committee
Documents
2024/01/11
   EP - Committee draft report
Documents
2023/10/13
   ECB - European Central Bank: opinion, guideline, report
2023/07/19
   EP - BERGER Stefan (EPP) appointed as rapporteur in ECON
2023/07/13
   EP - Committee referral announced in Parliament, 1st reading
2023/06/29
   EC - Document attached to the procedure
2023/06/29
   EC - Document attached to the procedure
2023/06/28
   EC - Legislative proposal published
Details

PURPOSE: to establish detailed rules on the scope and effects of legal tender and access to euro banknotes and coins.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: the arrival of the euro as the single European currency was a major step forward in European integration. Euro cash is a dominant means of payment, as citizens and retailers use euro cash in daily transactions to make payments or give change in the euro area. Cash is the only means of payment that allows direct in-person payments, with immediate settlement and without involvement of any third party or use of electronic equipment.

The growth of electronic payments, a trend accelerated by COVID-19, has led to a general decline in cash payments and the reduction of automated teller machine (ATM) networks in a number of Member States means there are risks to accessing cash. Thus, the issue of the scope and meaning of the legal tender status of cash has become more prominent in the EU policy agenda, as outlined in the Commission’s Retail Payments Strategy and in view of the recent ruling of the Court of Justice of the European Union on the matter.

CONTENT: euro cash is legal tender in the euro area. The proposal clarifies what is meant by legal tender and sets out the rules for the mandatory acceptance of cash and any limited exceptions to this. In addition, it also defines what Member States must do to ensure that cash is widely accepted and easily accessible .

The proposal aims to safeguard the continued and widespread acceptance of cash throughout the euro area and also to ensure that citizens have sufficient access to cash to be able to pay in cash if they so wish.

Definition of legal tender and exceptions

The proposal establishes, for the first time in secondary legislation , a definition and regulation of legal tender for cash. It codifies and clarifies the judgment of the Court of Justice of the European Union of January 2021, which sets out the principles of legal tender. In line with that case law, the proposal defines the legal tender of cash as entailing mandatory acceptance, at full face value, with the power to discharge from a payment obligation. A payee shall not refuse euro cash tendered in payment unless the parties have agreed on a different means of payment or an exception applies.

Conditions are laid down under which a refusal to accept euro cash would be legally possible; such a refusal must be made in good faith, be based on legitimate grounds, and in line with the principle of proportionality in view of the concrete circumstances in which a payment is to be made. The burden of proof that these conditions are met for such good faith circumstantial exceptions is on the payee. The proposal sets out two legitimate grounds on which euro cash may be refused on that basis in a non-exhaustive list, namely the tendering of banknotes the value of which is manifestly disproportionate to the value of the amount to be settled, and in exceptional cases where, at the relevant time, the enterprise has no change available or if the enterprise would not have enough change available as a result of that payment to carry out its normal transactions.

Acceptance of payments in cash

The proposal aims to ensure that the fundamental legal tender principle of mandatory acceptance is not undermined by widespread cash non-acceptance levels through the unilateral and ex ante exclusion of cash by enterprises. Member States would be obliged to monitor the level of ex ante unilateral exclusions of payments in cash and to ensure the acceptance of cash fulfilling the principle of mandatory acceptance of cash. Member States would report annually their assessment to the Commission and the European Central Bank. If cash non-acceptance levels are deemed to undermine the mandatory acceptance of euro banknotes and coins, Member States would need to take remedial measures.

Access to cash

The proposal establishes the obligation on Member States to ensure sufficient and effective access to cash throughout their territory, in all their regions, including urban and non-urban areas. This is required to safeguard the effectiveness of the legal tender of euro cash in practice. Member States would have the obligation to monitor the access to cash. They would also need to assess annually the situation in their territory and report their assessment to the Commission and the European Central Bank. If sufficient and effective access to cash is not ensured, Member States would need to take remedial measures.

Procedural aspects

Procedural aspects are set out to effectively implement the obligations concerning the acceptance of payments in cash and access to cash. In this regard, all Member States are required to designate one or more national competent authorities, which would have the necessary administrative and regulatory powers as regards acceptance of payments in cash and access to cash.

The designated national competent authorities would be entitled to assess if the principle of mandatory acceptance of cash is not undermined by widespread cash non-acceptance levels through the unilateral and ex ante exclusion of cash by enterprises, and if the access to cash is sufficient and effective in the Member States’ territories.

Interaction between euro banknotes and coins and the digital euro

The proposal requires the convertibility of cash and the digital euro into each other at par, and for the avoidance of doubt gives the payer the right to choose to pay in cash or digital euro where mandatory acceptance of both applies in accordance with this Regulation, including notably those provisions affecting mandatory acceptance, as well as with the digital euro Regulation .

Documents

AmendmentsDossier
153 2023/0208(COD)
2024/01/29 ECON 153 amendments...
source: 758.713

History

(these mark the time of scraping, not the official date of the change)

forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts
  • date: 2024-04-22T00:00:00 title: Indicative plenary sitting date
forecasts/0
date
2024-04-08T00:00:00
title
Vote scheduled in committee
forecasts/0
date
2024-04-08T00:00:00
title
Vote scheduled in committee
forecasts/0
date
2024-04-08T00:00:00
title
Vote scheduled in committee
forecasts/0
date
2024-04-08T00:00:00
title
Vote scheduled in committee
forecasts/1/date
Old
2024-04-10T00:00:00
New
2024-04-22T00:00:00
forecasts/0/date
Old
2024-03-04T00:00:00
New
2024-04-08T00:00:00
docs/4
date
2024-01-29T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/ECON-AM-758713_EN.html title: PE758.713
type
Amendments tabled in committee
body
EP
forecasts/1/date
Old
2024-04-22T00:00:00
New
2024-04-10T00:00:00
docs/3
date
2024-01-11T00:00:00
docs
url: https://www.europarl.europa.eu/doceo/document/ECON-PR-758001_EN.html title: PE758.001
type
Committee draft report
body
EP
forecasts/0/date
Old
2024-04-09T00:00:00
New
2024-03-04T00:00:00
forecasts/1
date
2024-04-22T00:00:00
title
Indicative plenary sitting date
docs/2
date
2023-10-13T00:00:00
docs
type
European Central Bank: opinion, guideline, report
body
ECB
commission
  • body: EC dg: Economic and Financial Affairs commissioner: GENTILONI Paolo
forecasts
  • date: 2024-04-09T00:00:00 title: Vote scheduled in committee
committees/0/shadows/2
name
HAHN Henrike
group
Group of the Greens/European Free Alliance
abbr
Verts/ALE
committees/1/opinion
False
committees/0/shadows/4
name
MACMANUS Chris
group
The Left group in the European Parliament - GUE/NGL
abbr
GUE/NGL
committees/0/shadows/1
name
BOYER Gilles
group
Renew Europe group
abbr
Renew
procedure/Legislative priorities
  • title: Joint Declaration 2023-24 url: https://oeil.secure.europarl.europa.eu/oeil/popups/thematicnote.do?id=41380&l=en
committees/0
type
Responsible Committee
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EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
rapporteur
name: BERGER Stefan date: 2023-07-19T00:00:00 group: Group of European People's Party abbr: EPP
shadows
committees/0
type
Responsible Committee
body
EP
committee_full
Economic and Monetary Affairs
committee
ECON
associated
False
shadows
committees/0/shadows/0
name
TANG Paul
group
Group of Progressive Alliance of Socialists and Democrats
abbr
S&D
committees/0/shadows
  • name: HOOGEVEEN Michiel group: European Conservatives and Reformists Group abbr: ECR
docs/0
date
2023-06-28T00:00:00
docs
type
Legislative proposal
body
EC
events/0/summary
  • PURPOSE: to establish detailed rules on the scope and effects of legal tender and access to euro banknotes and coins.
  • PROPOSED ACT: Regulation of the European Parliament and of the Council.
  • ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.
  • BACKGROUND: the arrival of the euro as the single European currency was a major step forward in European integration. Euro cash is a dominant means of payment, as citizens and retailers use euro cash in daily transactions to make payments or give change in the euro area. Cash is the only means of payment that allows direct in-person payments, with immediate settlement and without involvement of any third party or use of electronic equipment.
  • The growth of electronic payments, a trend accelerated by COVID-19, has led to a general decline in cash payments and the reduction of automated teller machine (ATM) networks in a number of Member States means there are risks to accessing cash. Thus, the issue of the scope and meaning of the legal tender status of cash has become more prominent in the EU policy agenda, as outlined in the Commission’s Retail Payments Strategy and in view of the recent ruling of the Court of Justice of the European Union on the matter.
  • CONTENT: euro cash is legal tender in the euro area. The proposal clarifies what is meant by legal tender and sets out the rules for the mandatory acceptance of cash and any limited exceptions to this. In addition, it also defines what Member States must do to ensure that cash is widely accepted and easily accessible .
  • The proposal aims to safeguard the continued and widespread acceptance of cash throughout the euro area and also to ensure that citizens have sufficient access to cash to be able to pay in cash if they so wish.
  • Definition of legal tender and exceptions
  • The proposal establishes, for the first time in secondary legislation , a definition and regulation of legal tender for cash. It codifies and clarifies the judgment of the Court of Justice of the European Union of January 2021, which sets out the principles of legal tender. In line with that case law, the proposal defines the legal tender of cash as entailing mandatory acceptance, at full face value, with the power to discharge from a payment obligation. A payee shall not refuse euro cash tendered in payment unless the parties have agreed on a different means of payment or an exception applies.
  • Conditions are laid down under which a refusal to accept euro cash would be legally possible; such a refusal must be made in good faith, be based on legitimate grounds, and in line with the principle of proportionality in view of the concrete circumstances in which a payment is to be made. The burden of proof that these conditions are met for such good faith circumstantial exceptions is on the payee. The proposal sets out two legitimate grounds on which euro cash may be refused on that basis in a non-exhaustive list, namely the tendering of banknotes the value of which is manifestly disproportionate to the value of the amount to be settled, and in exceptional cases where, at the relevant time, the enterprise has no change available or if the enterprise would not have enough change available as a result of that payment to carry out its normal transactions.
  • Acceptance of payments in cash
  • The proposal aims to ensure that the fundamental legal tender principle of mandatory acceptance is not undermined by widespread cash non-acceptance levels through the unilateral and ex ante exclusion of cash by enterprises. Member States would be obliged to monitor the level of ex ante unilateral exclusions of payments in cash and to ensure the acceptance of cash fulfilling the principle of mandatory acceptance of cash. Member States would report annually their assessment to the Commission and the European Central Bank. If cash non-acceptance levels are deemed to undermine the mandatory acceptance of euro banknotes and coins, Member States would need to take remedial measures.
  • Access to cash
  • The proposal establishes the obligation on Member States to ensure sufficient and effective access to cash throughout their territory, in all their regions, including urban and non-urban areas. This is required to safeguard the effectiveness of the legal tender of euro cash in practice. Member States would have the obligation to monitor the access to cash. They would also need to assess annually the situation in their territory and report their assessment to the Commission and the European Central Bank. If sufficient and effective access to cash is not ensured, Member States would need to take remedial measures.
  • Procedural aspects
  • Procedural aspects are set out to effectively implement the obligations concerning the acceptance of payments in cash and access to cash. In this regard, all Member States are required to designate one or more national competent authorities, which would have the necessary administrative and regulatory powers as regards acceptance of payments in cash and access to cash.
  • The designated national competent authorities would be entitled to assess if the principle of mandatory acceptance of cash is not undermined by widespread cash non-acceptance levels through the unilateral and ex ante exclusion of cash by enterprises, and if the access to cash is sufficient and effective in the Member States’ territories.
  • Interaction between euro banknotes and coins and the digital euro
  • The proposal requires the convertibility of cash and the digital euro into each other at par, and for the avoidance of doubt gives the payer the right to choose to pay in cash or digital euro where mandatory acceptance of both applies in accordance with this Regulation, including notably those provisions affecting mandatory acceptance, as well as with the digital euro Regulation .
events/1
date
2023-07-13T00:00:00
type
Committee referral announced in Parliament, 1st reading
body
EP
procedure/dossier_of_the_committee
  • ECON/9/12428
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision