Key Takeaways
- The Greek drachma was the currency of Greece before it was replaced by the euro in 2002. It was also the ancient money of the Greek empire and city-states.
- Drachma note denominations varied greatly over much of its existence.
- Greece has experienced significant financial challenges since the mid-2000s, leading to debates about the benefits of using the euro.
- A movement known as Grexit, which proposes a return to the drachma, gained momentum during Greece’s debt crisis.
Understanding the Greek Drachma
The drachma has a rich heritage dating back to ancient Greek city-states. It was brought back in 1832, following the establishment of modern Greece, replacing the phoenix, the nation’s first currency post-independence from the Ottoman Empire. In 2002, the drachma was phased out in favor of the euro and ceased to be legal tender.
The initial 500- and 5000-drachma notes appeared in 1928, which later expanded to include denominations of 1,000, 50, and 100 drachmas in 1935. With the Axis occupation of Greece during WWII, higher denominations like 20,000-, and 50,000-drachma notes were introduced due to rampant inflation, reaching as high as 100 billion drachmas. Since the war, new drachma notes were issued, with the last revaluation in 1953 leading to new values: one new drachma was equivalent to 1,000 old drachmas. Coins, including 10- and 20-drachma pieces, also saw circulation.
Modern Greek drachmas were officially replaced by the euro at an exchange rate of 340.750 drachmae to one euro in 2001, with the euro becoming the sole currency in January 2002.
The Greek Drachma and Grexit
The Greek debt crisis of 2009 ignited debates about abandoning the euro and reintroducing the drachma, a scenario known as
Related Terms: Ancient Greek Drachma, Eurozone, Greek Economy, Austerity Measures, Financial Crisis.
References
- Howard M. Berlin. “World Monetary Units: An Historical Dictionary, Country by Country”, Pages 68-69. McFarland & Company, Inc., 2006.
- Bank of Greece. “Drachma Banknotes”.
- Bank of Greece. “Drachma Coins”.
- European Commission. “Greece and The Euro”.
- Bertelsmann Stiftung, New Perspectives on Global and European Dynamics. “The Grexit Explained by the Global Economic Dynamics Project”.
- The Guardian. “Greek Referendum: Full Results”.
- Council on Foreign Relations. “1974 – 2018, Greece’s Debt Crisis”.
- Numismatic Guaranty Company. “NGC Ancients: The Elusive ‘Full Crest’ Owls of Athens”.
- Britannica. “Drachma”.
