To: TobagoJack who wrote (36677 ) 7/30/2003 11:12:27 PM From: elmatador Respond to of 74559 Why money paper is no good: Sofa so good for a euro windfall By Ed Crooks, Economics Editor Published: July 30 2003 5:00 | Last Updated: July 30 2003 5:00 Those cash-strapped European governments desperate to fill holes in their budgets are getting a welcome boost from more than €13bn-worth (£9.2bn) of the eurozone's "legacy" currencies that still exist somewhere. After the introduction of euro coins and notes at the beginning of last year the old currencies of the eurozone were swiftly withdrawn from circulation. But the website centralbanknet.com calculates that there are €13.094bn-worth of D-Marks, francs, lire, pesetas et al still outstanding - tucked under mattresses, kept as souvenirs or lost down the back of Europe's sofas. Much of that money is unlikely ever to be seen again by the authorities. Most of it, in particular the D-Mark - once in great demand as an unofficial currency in eastern Europe and Turkey - may be in the less than clean hands of people who are unlikely to turn up at central banks with a suitcase full of used notes. Nick Carver of centralbanknet said: "One of the attractions of cash is that we don't know who's got it. But the idea that it's all due to people hanging on to it as souvenirs is quite unlikely." Bank notes are claims on the central bank, and hence the government. If they will never need to be honoured, they represent a gain to the bank that can then be passed on to taxpayers. Ireland and Italy have so far been the most aggressive in booking the profits through to the government's accounts. Ireland has assumed that four-fifths of its missing punts will not be returning, and has delivered €234m; Italy has taken €605m, about two-thirds of its expected windfall. But the country facing the biggest potential gain has not yet done anything about it. Germany still has €4.8bn-worth of D-Marks in circulation, but so far the Bundesbank has no plans to count them as profits.