For those still holding Irish punt currency after the changeover to the European Union’s single currency, luckily there isn’t a deadline looming on the horizon to exchange them. But those still pocketing the Irish legacy currency may want to consider redeeming them taking into consideration the rate of annual inflation. Or, perhaps consider selling the better grade examples to collectors of coins and banknotes for higher returns.
The changeover from legacy currencies to the Euro single currency was one of the largest ever monetary transitions the world had ever known. Nineteen years ago, twelve out of the then fifteen member states of the European Union and their populations of over 300 million relegated their eleven national currencies (Belgium and Luxembourg shared the same monetary system) into the history books. They did this in favour of the Euro, a virtual currency from 1999 and which became a reality with actual notes and coins on the 1st January 2002. Since this time, several countries and their Central Banks who issued the Euro have removed the exchangeable status from their legacy currencies after a period of two to twelve years from 2002 which gave members of the public the chance to redeem their banknotes and coins for Euro during this time.
The Republic of Ireland was one of the twelve original member states to adopt the Euro and within the first decade of the changeover, the Central Bank of Ireland reported that 90% of Irish Punts were taken out of circulation by the end of 2002, leaving just 463 million euros unaccounted for. In a country with a population of just over 6.5 million, that was a lot of unaccounted-for money. That figure has only been reduced by 116 million euros in the 19 years with the Central Bank recently declaring there is still 224 million euros in legacy banknotes and 123 million euros in punt-denominated coins still unaccounted for.
At the end of 2020, the Central Bank of Ireland also reported that less than 400,000 euros worth of Irish Punts were exchanged for the year, the smallest amount redeemed in a calendar year since Ireland moved to the Euro in 2002. As such, 347 million euros still remain unaccounted for, the greater sum in Punt banknotes, all notes issued since the A series up to the last C series remain valid for exchange.
However, in countries such as France, Italy and Spain the ability to redeem Francs, Lira or Drachmas has already expired – or in the case of Spain, is about to expire shortly, leaving many people with worthless currency and disappointed hopes, some holding small fortunes. Spare a thought for the tens of thousands of people in the EURO-zone who, through a series of blunders, ignorance or simply coming across unforgotten stacks of banknotes hidden by deceased family members were unable to redeem and enjoy their new-found would-be fortunes.
In February 2012, the Banque du France reported that more than 550 million euros worth of Francs were never been redeemed in the decade since the Euro was introduced. Thus the French Treasury had essentially enjoyed a windfall of this same amount, simply due to the expiration date and official demise of the centuries-old French Franc. Today, many visitors to Paris can stroll through outdoor antique markets and find boxes full of these beautiful banknotes of 100, 200 or even 500 Francs for just a few Euros each – now considered the ultimate souvenir.
Ahead of adopting the Euro currency on the 1st January 2002, Italy’s central bank set a time limit of just under ten years for the exchange of the Lire. Any coins or banknotes not presented to the bank for exchange before the 6th December 2011 would be worthless. The Banca D’Italia applied the earliest time limit of all eventual 18 EURO-zone countries, although Finland, France and Greece extended this deadline by two to three months. It has been estimated that in Italy, a country where it was commonplace to save large amounts of banknotes under mattresses and in dresser drawers, more than 1.5 billion euros worth of Lire went unclaimed by the expiration date.
Despite the severe economic trauma Greece suffered by Greeks during most of the last decade, the Bank of Greece estimated by March 2012, the deadline to exchange Drachmas, there were still more than 250 million euros worth of unredeemed drachma banknotes and coins which went unexchanged. Officials summarised the money was likely taken out of the country by countless tourists, lost or just destroyed in some manner. The Bank did emphasise that anyone hoarding Drachmas in the hope the country would revert back to the national currency would still be out of luck as any new Drachma – if it ever materialised would have no connection to, or have any redeemable value to the old.
A recent report published by the Banco de España, suggested that up until November 2019, there were still over 268 Billion Pesetas or 1.610 Billion euros that had still gone unredeemed. The deadline to redeem all outstanding Peseta banknotes was to take place on the 31st December 2020 when the bank would cease to exchange of Pesetas for Euro. However, due to the ongoing Flu pandemic, this deadline has been extended to the 30th June 2021 and Pesetas can now be exchanged at any of the fifteen Banco de Espana branches. Peseta holders – be assured, your money isn’t worthless just yet but be aware the final deadline is less than six months away.
Ultimately, this unredeemed money or its represented value is transferred to the treasuries of their respective countries, meaning it is regarded as a “bonus” or windfall which may either be applied to reducing a country’s national debt or just added to the Gross Domestic Product. Taking into consideration the four countries mentioned above, collectively the amount of unclaimed legacy currencies in Euro amounts to nearly 4 billion euros – an extraordinary sum.
Given the choice of discarding these notes or looking for other ways to find value in their “old money” some savvy holders of these legacy notes and coins have taken a different or creative approach to redeeming their notes and coins. Holders of these items should consider that some of these Francs, Lira, Drachmas or Pesetas have greater value as collector’s items if their condition is considered acceptable to avid banknote and coin collectors.
In Ireland, as in Germany for instance, there is no time limit for the exchange of old currency notes or coins allowing for everyone still in possession of the old currency to eventually exchange them for EURO’s. For additional information on legacy currencies still redeemable, please visit the website of the European Central Bank.
The author, Michael Alexander, is president of the London Banknote and Monetary Research Centre.