Why do the 1 and 2 euro cent coins exist and why are they used?
While dealing with US pennies and not 1 and 2 cent euro pieces, you may find this Wikipedia article of interest and analogous: Penny debate in the United States This article briefly summarizes both the arguments for and against retaining the one cent piece.  The arguments against include: Arguments for preservation include: Already a number of countries have removed their equivalents of the one and two cent coins, including New Zealand, Sweden, Australia, Israel, and Brazil (to name a few). I guess other than tradition and inflation, probably because the merchants want them.   In the US, what currently costs $2.00 used to cost $0.10.   So 75 years ago, those individual cents made a pretty bid difference.  Inflation causes prices to go up, but doesn't get us to just change our currencies patterns. In your example, you are assuming that in an average day, the rounding errors you are willing to accept happen a couple of times.  2 or 3 cents here and there mean nothing to you.  However to the merchant, doing hundreds or thousands of transactions per day, those few cents up and down mean quite a bit in terms of profit. To an individual, looking at a time frame more than a single day (because who only participates in economies for a single day) there are potentially millions of transactions in a lifetime, mean potentially giving away millions of dollars because they didn't want to wait. And as for the comment that people working each 3 cents every 10 seconds, I would assume at least some of the time when they are waiting for rounding errors, they are not at work getting paid.  That concept is assuming that somebody is always willing to pay them for their time regardless of where that person is in the world; I have no facts and wild assumptions, but surely that can't be true for even a majority of workers. Finally, you should be happy if you happy to have an income high enough that you don't care about individual cents.  But there are those business people who see opportunity in folks like you and profit greatly from it.  I personally worry very much about who has my money; gov't gets paid to the penny and I expect returns to the penny.  A super polite service employee who smiled a lot serving me a beer is getting all the rounding errors I have.
The Swiss franc has appreciated quite a bit recently against the Euro as the European Central Bank (ECB) continues to print money to buy government bonds issues by Greek, Portugal, Spain and now Italy.  Some euro holders have flocked to the Swiss franc in an effort to preserve the savings from the massive Euro money printing.  This has increased the value of the Swiss franc.  In response, the Swiss National Bank (SNB) has tried to intervene multiple times in the currency market to keep the value of the Swiss franc low.  It does this by printing Swiss francs and using the newly printed francs to buy Euros.  The SNB interventions have failed to suppress the Swiss franc and its value has continued to rise.  The SNB has finally said they will print whatever it takes to maintain a desired peg to the Euro.  This had the desired effect of driving down the value of the franc. Which effect will this have long term for the euro zone? It is now clear that all major central bankers are in a currency devaluation war in which they are all trying to outprint each other.  The SNB was the last central bank to join the printing party.  I think this will lead to major inflation in all currencies as we have not seen the end of money printing.  Will this worsen the European financial crisis or is this not an important factor? I'm not sure this will have much affect on the ongoing European crisis since most of the European government debt is in euros. Should this announcement trigger any actions from common European people concerning their wealth? If a European is concerned with preserving their wealth I would think they would begin to start diverting some of their savings into a harder currency.  Europeans have experienced rapidly depreciating currencies more than people on any other continent.  I would think they would be the most experienced at preserving wealth from central bank shenanigans. "Their ""worth"" is whatever someone is willing to pay to have them.  The mint presumably thinks that some people (collectors) are willing to pay at least 55$ CAD for them. Their value as currency is only 3$ CAD. Their value as precious metal/crystal is irrelevant, as its illegal to melt (without explicit permission) coins that are legal tended in Canada." I'm pretty sure using it wastes a lot of man-hours in the economy.  Handling money isn't cheap.  Handling pennies is asinine.  We should probably get rid of nickels and quarters too just to do away with the last decimal place, just dimes and a (smaller than current) half-dollar. "The face value of the pennies is meaningless; the $80 didn't ""go"" anywhere.  The metal in those pennies is still worth $180 (less whatever small amount was lost in the stamping/production process).  It's essentially the same thing as asking where the $99.877 worth of profit is when you spend 12.3 cents to create a $100 bill.  We shouldn't be saying that we lose [production cost of coin] minus [face value of coin] when producing a coin.  But it certainly is correct to question why we spend such-and-such to produce a coin that many people don't want to use in the first place." Some answers already informed about denomination. There are currencies, doing the cut off of two digits, for example the french franc. See http://en.wikipedia.org/wiki/French_franc#New_franc  When you look to old french movies, they often talked about 'old franc' when talking about values (at least in French original, I don't know what happens in English translations). AFAIK money is a fiat currency. The penny is only worth what the US government says it it worth. If I choose to have my coin material made into pennies then I face an opportunity cost because I could of used that copper elsewhere. If a penny worth of copper is worth 1.8 cents and I choose to make it into a a coin with a value of 1 cent then my opportunity cost is .8 cents.  The whole point of a fiat currency is to take the actual material value of the money out of the equation. A gold coin back before fiat currencies was worth its weight in gold. This would be like saying that you are going to nominally change the value of your gold coin into a coin worth half of its weight. Its weight(value) is equal to 1 gold coin but its spending power is equal to 1/2 a gold coin.  Do you lose value? Of course not. Do you lose spending power? YES Fiat currency is all about spending power, the value is fictional.   When I make the spending power less than the value the purpose of a fiat currency breaks down. Are you trying to get someone to do your homework for you?  This question has been answered repeatedly in the negative by everyone who actually studies the economy.  Read Mundell-Flemming model, and learn this stuff.  You can see why currency regimes like the Euro make sense from a theoretical stand point, but where flexible exchange rates are a welcome release valve for pressures.  You obviously have never studied economics. Hyper inflation doesn't happen becuase of floating exhange rates.  Hyperinflation happens when people lose faith in the governing body, regardless of who that is.  You think political regimes won't change just because there is one currency?  No, they will still spent 1.05 for every dollar they bring in taxes.  Hyperinflation is not a problem of floating exchange rates, it doesn't follow from any causal relationship. "The simplest answer would be: Because they can. Why charge less for something if people will pay more? One example are Apple products. While there the price number is not exactly the same in EUR and USD, they are so close that, effectively, the EUR product is more expensive. Many things go into a price. There might be reasons for products in the EU being more expensive to produce or distribute. Or people in the EU might be in general more willing to pay more for a certain product. In that case, a company would forgo profits when they offered it cheaper. Also, prices are relative. Is the USD price the ""correct"" one and the exchange rate should dictate what the EUR price is? Or vice versa?" Yes, they're using it as a currency.  What they actually have demand for is houses and Lambos, and if bitcoin wasn't available they'd be happy to do it in any other currency.  When any other currency goes up it's because there's overall higher demand than supply for it, to buy things you can only buy in a particular currency.    A very common example is government bonds of the issuing government for a currency.  That's why when the Fed raises the interest rate, the US dollar goes up.  It is because at a bond auction the government will only take US dollars so anyone that wants to buy some bonds needs to first buy US dollars.  If the interest rate goes up, all things being equal those bonds are relatively more attractive than other countries bonds, and that change in demand increases the demand for the currency, which raises it's price.  Note the key thing here - it needs to be something you can only buy (or at least, buy for the cheapest price) in a particular currency.  If it's something you can buy with any currency, than that event generally doesn't impact the currency price.  Although it's a very important food crop, if the price of rice goes up, it doesn't really impact the USD even though you can buy rice with USD.  Here's the tricky part, what can you buy with bitcoin that you can't buy with any other currency? "Currencies such as the dollar, the Euro, and most others are no longer tied to gold in any way. They are just paper that is worth what it's worth because everyone agrees to accept it.  Previously, currencies used to be commonly tied to gold reserves, and could theoretically be ""cashed in"" for gold, although not usually as much as the currency denomination (i.e., gold on the open market tended to sell for higher prices than what the government would give you for it)." "1.)  The US mint is a private business.  There's your first flaw of any argument about currency before we talk further.          2.)  That small percentage value of the penny ""not being worth your time"" is a huge fallacy.  It might not be worth anything to him, but I generally would be intent on getting a few cents back that are due to me.  Similarly, using his example of 3 cents adding 2 seconds to the transaction ends up at a rate of $54/hr.  That's quite a bit of money to be considered.          3.)  No machines take pennies.  Fair enough.  Not really the fault of the penny itself, but more so a fault of brash inflation.          4.)  Supposing the penny does get removed, the axe gets held above the neck of the nickle inevitably.  Then the dime, and so on.  You'll also see a massive disruption in handling of accounting principles and tax rates due to being forced into /5 rates.  All adjustable, yes, but it does cause a whole new mess of issues in it's own right.          5.)  Lincoln's face has nothing to do with this argument.  25 seconds worth of video wasted (that's about 35 pennies worth)." "Many years ago you used to be able to purchase ""currency packs"" that were combined bundles of currencies from western Europe based on the number of days you would be spending in each country. The exchange rates on these were very favorable and they had minimal surcharges.   With the rise of the euro I doubt these bundles are still available as I haven't seen them myself in about 10 years." I don't like paying the percentage on the supermarket coin counters, and don't feel like buying a coin counter so I have my own solution. I keep higher value coins for vending machines, parking meters etc, and lower value coins I put in charity boxes. The collectible value of coins will probably increase with the underlying metal value. I'd collect coins for that reason and because I enjoy collecting them. I wouldn't recommend buying bags of rolled nickels or anything though. Rates are arrived at by the cumulative buying and selling on the foreign exchange market, much the same way that stock prices are arrived at.  If there are more people wanting to buy dollars with euros, EUR/USD goes down.  If more people want to buy euros with dollars, then EUR/USD goes up. The initial rate was about $1.18 per euro when it began trading on January 1st, 1999.  It replaced the European Currency Unit at that time, which was a weighted basket of currencies of (more or less) the participating countries. You're correct about the printing press in the US and other countries.  The exchange rates do reflect in part how much of a relative workout those printing presses get.