European countries which have ditched their national currencies in favour of the euro have been told they cannot use unreturned national cash to improve their budgets.

Eurostat wanted to take a firm stance given there are all sorts of questions about governments fiddling their [deficit] figures

Dominique Barbet Economist BNP Paribas

Eurostat's decision effectively outlaws any massaging of the euro members' national accounts which would have either reduced their budget deficits or boosted their surpluses.

The decision has annoyed some eurozone countries.

Ireland, for one, had hoped to take advantage of a windfall which has arisen because some of the punts which had been issued have not been exchanged into euros, either because they have been lost, destroyed or kept by collectors.

"The impact is to exclude 610m euros (�392m; $619m) from the general government surplus, which at the start of the year we had estimated at 837m euros," said a spokesman for the Irish finance ministry.

Missing money

Without the windfall, Ireland's surplus is expected to be marginal in comparison with the estimate.

But other countries have it worse.

A whopping 42bn euros worth of national currencies had not been returned to central banks in the eurozone by February, the European Central Bank said.

At least 30bn euros are believed to be still out there and the rate with which people return national cash has dwindled to a trickle.

Injecting figures of this magnitude into national accounts would have helped many a eurozone nation to better meet the European Union's budget rules.

Tricky pact

The EU's Stability and Growth Pact stipulates that no eurozone member can have a deficit of more than 3% of gross domestic product.

Several countries have come dangerously close to breaching the pact, forcing the European Commission to consider relaxing the rules.

Take Germany which was warned in January that it was in danger of ending up with a deficit of more than 3% of its GDP.

In Germany, there were 5.38bn euros worth of Deutschemark notes and 3.98bn euros worth of D-mark coins still in circulation by the end of June, according to the Bundesbank.

The D-mark notes make up about 4.5% of all notes issued in Germany, the Bundesbank estimated.

Bringing these sums into the national accounts would benefit Germany's budget immensely.

No problem

Eurostat decided that the notes should be treated just as the governments' other assets and liabilities.

"By analogy with assets and liabilities, holding gains or losses and other changes in the volume of them change the government's net worth but not government deficit," Eurostat said.

Non-returned coins are considered a liability of national governments, Eurostat said.

"The treatment of gains from non-returned coins in government balance sheets has an impact on the government debt but leave the government deficit unchanged," Eurostat said.

"Eurostat wanted to take a firm stance given there are all sorts of questions at the moment about governments fiddling their [deficit] figures," said BNP Paribas economist Dominique Barbet.

"But it is not going to create any major problems for budget deficits."

"It doesn't come as a surprise. We had anticipated this ruling," said Irish finance ministry spokesman.