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Greek drachma is off the market

Published Sep. 28, 2005

Europe's oldest currency, the 2,650-year-old Greek drachma, has endured war and turmoil. On Friday, it finally met its match in the euro and was traded on the international market for the last time.

Greece officially joins the European Union's single currency on Monday, and financial institutions will begin trading in the euro on Wednesday. Banks and the Athens Stock Exchange will remain closed Tuesday to facilitate the transition.

The Greek central bank spent money for the last time Friday to fix the drachma at its central parity rate, selling some $139.5-million to keep the drachma up.

The drachma _ meaning "handful" in ancient Greek _ was the standard silver coin of Greek antiquity. It is believed to have been first minted in about 650 B.C. in what is now western Turkey and was originally worth a handful of arrows.

Produced separately by different city-states, the drachma was widely used in the ancient world. Spread by trade and conquest _ it was the coin of Alexander the Great _ it has been found as far away as Afghanistan.

After years of belt-tightening fiscal policies in the 1990s, Greece managed to overhaul its economy and bring it into line with the rest of Europe, gaining acceptance for participation in the euro. It had been the only member wishing to join the European Union that initially failed to meet single currency requirements.

But while Friday was the last day of international trading for the drachma, the currency now in circulation still has a year's worth of life.

The euro will not be used for everyday transactions such as shopping until the beginning of 2002. Officials aim to gradually phase out the drachma by March 2002.

There are 367 drachmas to the dollar, and parity with the euro has been set at 340.75 drachmas.

The common European currency debuted in 11 countries a year ago. On Friday, the Vatican also said it will adopt the euro as its official currency.