Банкеръ Weekly

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EUROPE'S OLDEST CURRENCY, THE DRACHMA IS REMOVED FROM INTERNATIONAL MARKET

Europe's oldest currency, the 2,650-year-old Greek drachma, has endured war and turmoil. On last Friday of 2000 it finally met its match in the euro and was traded on the international market for the last time.
Greece officially joined the European Union's common currency on Jan. 1. Banks and the Athens Stock Exchange remained closed on Jan. 2 to facilitate the transition.
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. It also served as the model for another coin, the dirham, which is still used as an expression of currency in the Islamic world.
The modern drachma was revived in the 1830s after Greece gained independence from Ottoman rule, as the country's new monarchy tried to evoke the spirit of classical Greece.
After years of belt-tightening fiscal policies in the 1990s, Greece managed to overhaul its economy and bring it in line with the rest of Europe, gaining acceptance for participation in the euro. It had been the only EU member wishing to join the euro zone that initially failed to meet single currency requirements.
But with popular support for joining the euro running at 70% in Greece, mild nostalgia at the loss of the drachma is tempered with feelings of pride for Greece's economic success. Besides, the depiction of antiquity on one side of some of the new euro coins will temper any sentimental feelings for the loss of 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, at which point the 11 European countries that are currently using the currency in electronic transactions also will introduce euro coins and notes. 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.
At the end of last year the Vatican also said it will adopt the euro as its official currency. The Holy See will follow the same introduction schedule as the euro-zone countries, said Vatican spokesman Joaquin Navarro-Valls.

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