Italy has unveiled a proposed €1 banknote, and will be lobbying for a change in the Euro system to ditch the €1 coin.
Italian Finance Minister Giulio Tremonti is in favour of a banknote instead of a coin, in order to fight the popular belief that living costs are soaring there since the currency changeover.
Greece is also a strong advocate of the introduction of such a note.
But the move would require approval by the European Central Bank.
A big jump in perceived inflation after the changeover prompted Greeks to organise a four-day boycott of shops and markets last year.
Belgium and Austria have signalled they too favour small denomination notes. Guy Quaden, governor of the National Bank of Belgium, said he supported ‘printing one euro notes if feasible’, and Klaus Liebscher, the Austrian central bank governor, said one euro notes should be introduced ‘as quickly as possible’.
At least five eurozone states are thought to be backing the move. It is thought many of the 10 accession countries would also favour small denomination notes.
Many ECB officials believe printing one euro notes would require the withdrawal of large numbers of coins.
Notes cost more to make and last only about a year. Coins can stay in circulation for years.
Some consumers believe higher prices were the result of retailers rounding up prices as they switched out of their old national currencies into the euro. However, EU statisticians insisted prices had not been affected.
In February, ECB President Wim Duisenberg said he was neutral on the issue, but a decision would only be taken after a study produced by the Bank.
He recognised that prior to the introduction of the euro, national notes of a similar value to €1 were in circulation in countries such as Italy, Greece and Austria.
But, he said, there was no demand for this note in countries such as France and Germany, and the vending machine industry is opposed to it.
