Spain: Pesetas Worth €1.7 Billion 'Still in Circulation'

[Bimat]

Billions of pesetas still in circulation

Sunday, 31 August 2014 18:04

THE BANK of Spain claims that €1.7 billion (£1.34 billion) worth of pesetas remain in circulation. There are €864 million (£638 million) in notes and €805 million (£637 million) in coins. The Euro replaced the now redundant currency 12 years ago.

It is believed that a large portion (45%) of the unchanged currency will never be exchanged, as it has fallen into the hands of collectors, tourists or may even have been lost. The Bank of Spain has set a deadline of 2020 for any exchanges, after which the currency really will be worthless.

In 2013 the bank exchanged €15 million (£11.8 million), about 2.5 billion pesetas. Of this, €12 million (£9.49 million) was the exchange of notes and the remainder in coins.

The introduction of the Euro 12 years ago proved a challenging time for Spain. The original value of 166 pesetas to €1 created high inflation in the first year of circulation. A 100 peseta coffee soon became €1, signifying a 66% increase in price.

Source: Euro Weekly News

[Figleaf]

This is the case in most, if not all EUR countries. Huge amounts of coins (banknotes less so) are not handed back. That doesn't mean they must be either souvenirs or collector's items. If that were so, metal detector pilots regularly turn up medieval, even ancient souvenirs and collectors items. Coins get lost. Just recently, I saw a woman on a street market losing some coins. They rolled in all directions and at least one disappeared into a sewer inlet. It will probably get eaten completely in that environment.

The real problem is accountants. They insist that all the outstanding (not: circulating) coins are a contingent liability, so the powers that be should have cash reserves, just in case a Spanish uncle Scrooge remembers he has a coin warehouse with €800 million in old Spanish coins Even if this is complete nonsense, only withdrawing the old coins will free this money from doing nothing.

It is not a coincidence the journalist mentions inflation impression, not inflation figures. The statistics say he's wrong. However, past imagined misery sells better than correcting past inaccuracies. The attachment shows a long term chart of annual inflation values based on the consumer price index (CPI). The EUR was introduced in 1999. Source: Inflation.eu

Peter

[augsburger]

That amount of money should be enough to double GDP and decrease unemployment down below the 150% mark (he says waiting for a skype interview for a job in SPAIN................... it'll be me, the only one with a job in Spain...............)

[Enlil]

Considering the Amount of ancient coins that are found, is it really surprising that a lot of old currency is not returned.

[izotz]

In Spain, only pesetas coins from the last series (and any banknote post civil war) can be redeemed. Once I was in bank of Spain. And old woman was on her own, carrying what a couple of very heavy bags of coins. She redeemed many of them, but the machine rejected a good bunch of 10 kilos of coins. The cashier explained to her that they were too old to be redeemed.

I talked with her. She had found them in an old house, and she wanted to get rid of them. I was actually junk, very common coins in bad condition. I told her I was a collector and offered not much money, but I think it was fair for worthless items. She accepted as she was too tired to carry the heavy weight back home.
Afterwards, I reviewed a few hundred of them, trying to hunt for an error, and spotted a couple of interesting things like two of these.

Next day I sold the rest as junk, just for the value of metal. Actually, worthless coins this time, but probably worth (let´s say) good 40€ forty years ago, that were lost forever.

I've seen stories like this many times, so yes, it makes sense that millions of euro got lost, as many coins just are gone, or sold as junk.