Finance:Modern drachma

Short description: Former currency of Greece (1832–2001)

Drachma

Δραχμή (Greek)
Modern drachma coins; Top row, left to right: 10λ coin, 20λ coin, 50λ coin, ₯1 coin, ₯2 coin. Middle row, left to right: ₯5 coin, ₯10 coin, ₯20 coin, ₯50 coin. Bottom row, left to right: ₯100 coin, ₯500 coin.
ISO 4217
Code	GRD
Unit
Symbol	₯‎ also Δρχ. or Δρ.
Denominations
Subunit
​1⁄100	leptοn (λ)
Banknotes
Freq. used	₯200, ₯1,000, ₯5,000, ₯10,000
Rarely used	₯50, ₯100, ₯500
Coins
Freq. used	₯5, ₯10, ₯20, ₯50, ₯100, ₯500
Rarely used	10λ, 20λ, 50λ, ₯1 and ₯2
Demographics
Replaced	Phoenix
Replaced by	Euro
User(s)	None, previously: Greece
Issuance
Central bank	Bank of Greece
Website	www.bankofgreece.gr
Printer	Banknote and Securities Printing Foundation
Mint	Banknote and Securities Printing Foundation
Valuation
Inflation	3.1% (2000)
Source	Grecian.net
EU Exchange Rate Mechanism (ERM)
Since	March 1998
Fixed rate since	19 June 2000
Replaced by euro, non cash	1 January 2001
Replaced by euro, cash	1 January 2002
1 € =	₯340.75
This infobox shows the latest status before this currency was rendered obsolete.

The drachma (Greek: δραχμή, [ðraxˈmi]) was the official currency of modern Greece from 1832 until the launch of the euro in 2001.

First modern drachma

The drachma was reintroduced in May 1832, shortly before the establishment of the Kingdom of Greece. It replaced the phoenix at par. The drachma was subdivided into 100 lepta.

Coins

The first coinage consisted of copper denominations of 1λ, 2λ, 5λ and 10λ, silver denominations of ₯​¹⁄₄, ₯​¹⁄₂, ₯1 and ₯5 and a gold coin of ₯20. The drachma coin weighed 4.5 g and contained 90% silver, with the ₯20 coin containing 5.8 g of gold.

In 1868, Greece joined the Latin Monetary Union and the drachma became equal in weight and value to the French franc. The new coinage issued consisted of copper coins of 1λ, 2λ, 5λ and 10λ, with the 5λ and 10λ coins bearing the names obolos (ὀβολός) and diobolon (διώβολον), respectively; silver coins of 20λ and 50λ, ₯1, ₯2 and ₯5 and gold coins of ₯5, ₯10 and ₯20. (Very small numbers of ₯50 and ₯100 coins in gold were also issued.)

In 1894, cupro-nickel 5λ, 10λ and 20λ coins were introduced. No 1λ or 2λ coin had been issued since the late 1870s. Silver coins of ₯1 and ₯2 were last issued in 1911, and no coins were issued between 1912 and 1922, during which time the Latin Monetary Union collapsed due to World War I.

Between 1926 and 1930, a new coinage was introduced for the new Hellenic Republic, consisting of cupro-nickel coins in denominations of 20λ, 50λ, ₯1, and ₯2; nickel coins of ₯5; and silver coins of ₯10 and ₯20. These were the last coins issued for the first modern drachma, none were issued for the second.

Notes

Notes were issued by the National Bank of Greece from 1841 until 1928. The Bank of Greece issued notes from 1928 until 2001, when Greece joined the Euro. Early denominations ranged from ₯10 to ₯500. Smaller denominations (₯1, ₯2, ₯3 and ₯5) were issued from 1885, with the first ₯5 notes being made by cutting ₯10 notes in half.

When Greece finally achieved its independence from the Ottoman Empire in 1828, the phoenix was introduced as the monetary unit; its use was short-lived, however, and in 1832 the phoenix was replaced by the drachma, adorned with the image of King Otto of Greece, who reigned as modern Greece's first king from 1832 to 1862. The drachma was divided into 100 lepta. In 2002 the drachma ceased to be legal tender after the euro, the monetary unit of the European Union, became Greece's sole currency.

From 1917 to 1920, the Greek government took control of issuing small change notes under Law 991/1917. During that time, the government issued denominations of 10 & 50 lepta, and ₯1, ₯2 & ₯5. The National Bank of Greece introduced ₯1,000 notes in 1901, and the Bank of Greece introduced ₯5,000 notes in 1928.

Banknote of 1912 issued by the NBG

The economic depression of the 1920s affected many nations around the globe, including Greece. In 1922, the Greek government issued a forced loan in order to finance their growing budget deficit. On 1 April 1922, the government decreed that half of all bank notes had to be surrendered and exchanged for 6.5% bonds. The notes were then cut in half, with the portion bearing the Greek crown standing in for the bonds while the other half was exchanged for a new issue of central bank notes at half the original value. The Greek government again issued notes between 1940 and 1944, in denominations ranging from 50 lepta to 20.

₯5 note that has been cut in half by government for the purpose of issuing bonds

During the German–Italian occupation of Greece from 1941 to 1944, catastrophic hyperinflation caused much higher denominations to be issued, culminating in ₯100,000,000,000 notes in 1944. The Italian occupation authorities in the Ionian Islands printed their own currency, the Ionian drachma.

Second modern drachma

Banknote of 1944 issued by the NBG

On 11 November 1944, following the liberation of Greece from Nazi Germany, old drachma were exchanged for new ones at the rate of ₯50,000,000,000 to ₯1. Only paper money was issued for the second drachma. The government issued notes of ₯1, ₯5, ₯10 and ₯20, with the Bank of Greece issuing ₯50, ₯100, ₯500, ₯1,000, ₯5,000, and ₯10,000 notes. This drachma also suffered from high inflation. The government later issued ₯100, ₯500, and ₯1,000-drachma notes, and the Bank of Greece issued ₯20,000 and ₯50,000 notes.

Third modern drachma

On 9 April 1953, in an effort to halt inflation, Greece joined the Bretton Woods system. On 1 May 1954, the drachma was revalued at a rate of ₯1,000 to ₯1, and small change notes were abolished for the last time. The third drachma assumed a fixed exchange rate of ₯30 per United States dollar until 20 October 1973: over the next 25 years, the official exchange rate gradually declined, reaching 400 drachmae per dollar. On 1 January 2002, the Greek drachma was officially replaced as the circulating currency by the euro, and it has not been legal tender since 1 March 2002.

Third modern drachma coins

The first issue of coins minted in 1954 consisted of holed aluminium 5-, 10- and 20-lepton pieces, with 50-lepton, ₯1, ₯2 and ₯5 pieces in cupro-nickel. ₯10 coins of a brighter alloy were issued in 1959 and a silver ₯20 piece was issued in 1960, replacing the corresponding banknotes. Coins in denominations from 50 lepta to ₯20 carried a portrait of King Paul (1947–1964). New coins were introduced in 1966, ranging from 50 lepta to ₯10, depicting King Constantine II (1964–1974). A silver ₯30 coin for the centennial of Greece's royal dynasty was minted in 1963. The following year a non-circulating coin of this value was produced to commemorate the royal wedding. The reverse of all coins was altered in 1971 to reflect the military junta which was in power from 1967 to 1974. This design included a soldier standing in front of the flames of the rising phoenix replacing the (royal) coat of arms and the date of the coup d'état, April 21, 1967.

A ₯20 coin in cupro-nickel with an image of Europa on the obverse was issued in the first series of 1973, alongside unholed aluminium lepta coins (10λ and 20λ). Following the abolition of the monarcy by the junta in June 1973, several new coin types were introduced: nickel-brass (50 lepta, ₯1, and ₯2) and cupro-nickel (₯5, ₯10, and ₯20). These coins carried the design of the phoenix rising from the flame on the obverse-but now without the soldier, a nod to the "liberalization plan" pursued by Papadopoulos, and used the country's new designation as the "Hellenic Republic", replacing the coins also issued in 1973 as the Kingdom of Greece with King Constantine II's portrait.

Following the downfall of the dictatorship, a new series of all 8 denominations was introduced in 1976 carrying images of Pericles, Democritus and Aristotle on the 20, 10 and 5 drachmai coins respectively and Georgios Karaiskakis, Konstantinos Kanaris and Markos Botsaris on the ₯1, 2 and 50 lepta coins respectively. The 20 and 10 lepton coins would be the only circulating, non-commemorative coins to bear the post-1975 Coat of arms of Greece on the obverse.

Cupro-nickel ₯50 coins were introduced in 1980, featuring Solon. Starting in 1982, all coins now bore the inscription drachmes rather than the katharevousa drachmai type, reflecting the resolution of the Greek language question. In 1986, aluminium-bronze ₯50 coins were introduced, followed by new, smaller copper ₯1 (Laskarina Bouboulina) and ₯2 (Manto Mavrogenous) pieces in 1988 and aluminium-bronze coins of ₯20 (Ioannis Kapodistrias) and ₯100 (Alexander the Great) in 1990. In 2000, a set of 6 themed ₯500 coins were issued to commemorate the 2004 Athens Olympic Games.

Subdivision

5 lepta coins were discontinued in the first series of 1973. 10 and 20 lepta coins were last minted in 1978 and the 50 lepta (half drachma) coin was last minted in 1986. By 1990, the lepton as a subdevision had become practically obsolete and the drachma itself was now used for small change-the prices of sundries were in the hundreds; its size and weight had been reduced in 1988 from 21mm, 4.1 grams to 20mm, 2.75 grams. The ₯2 coin experienced similar changes.

Coins in circulation at the time of the adoption of the euro were

• 50λ (€0.0015)
• ₯1 (€0.0029)
• ₯2 (€0.0059)
• ₯5 (€0.0147)
• ₯10 (€0.0293)
• ₯20 (€0.0587)
• ₯50 (€0.147)
• ₯100 (€0.293)
• ₯500 (€1.47)

Up until the introduction of the euro, the Greek government did not attempt to redenominate the drachma (to a simple 100 old drachmes = 1 new drachma rate), something that could have possibly contributed in a smooth transition to the new currency. The transition proved challenging due to the fact that the exchange rate (340.75 to 1 euro) included lepta (despite the fact that lepta were not used in physical transactions) and that the 20 and 50 euro cent coins (also called "lepta"), which were very similar in size and composition (Nordic Gold as opposed to 92% copper 6% nickel 2% aluminium) to the 20, 50 and 100 drachma coins, were initially deemed worthless (alluding to the pp of their drachma predecessors), allowing vendors to take advantage of psychological pricing. The most obvious example is the retail price of a 500ml bottle of water: once costing 50 drachmas (€0.147 in 2002), the price was driven by inflation to ₯100 (€0.293); but the introduction of the euro would increase the price to 0.50 euros, where it stands to date.

Gallery

• 

  Gold ₯20 coin depicting king Othon I, 1833

• 

  Gold ₯20 coin depicting king Georgios I, 1876

• 

  Gold ₯50 coin depicting king Georgios I, 1876

• 

  ₯5 coin, 1876

• 

  ₯1 coin during the 1973–1974 military controlled Republic, 1973

• 

  ₯1 coin depicting Konstantinos Kanaris, 1976

• 

  ₯1 coin depicting the Owl of Athena

• 

  ₯2 coin with a soldier standing in front of a Phoenix

Banknotes

The first issues of banknotes were in denominations of ₯10, ₯20 and ₯50, soon followed by ₯100, ₯500 and ₯1,000 by 1956. ₯5,000 notes were introduced in 1984, followed by ₯10,000 notes in 1995 and ₯200 notes in 1997.

Banknotes in circulation at the time of the adoption of the euro were

• ₯100 (€0.2935), depicting Athena and Adamantios Korais
• ₯200 (€0.5869), depicting Rigas Feraios
• ₯500 (€1.47), depicting Ioannis Capodistrias
• ₯1,000 (€2.93), depicting Apollo
• ₯5,000 (€14.67), depicting Theodoros Kolokotronis
• ₯10,000 (€29.35), depicting George Papanicolaou and Asclepius

Banknotes of the Greek drachma (circa AD 2000)
Image	Value	Equivalent in Euro (€)	Main Color	Obverse	Reverse	Watermark
[1]	₯50	€0.1467	Blue	Head of Poseidon	Laskarina Bouboulina directing cannon fire at two Ottoman ships at Palamidi during the Greek War of Independence	Head of the Charioteer of Delphi
[2]	₯100	€0.2935	Brown and violet (obverse); Maroon, green and orange (reverse)	Head of Piraeus Athena; Christian Hansen's National and Kapodistrian University of Athens building	Adamantios Korais; Arkadi Monastery, Crete	Head of the Charioteer of Delphi
[3]	₯200	€0.5869	Deep orange	Rigas Feraios; Feraios singing his patriotic song at lower right	Nikolaos Gyzis's Krifo scholio ("secret school")	Bust of Philip of Macedonia
[4]	₯500	€1.47	Deep green	Ioannis Kapodistrias; Capodistrias's home on Corfu	Old Fortress, Corfu City	Head of the Charioteer of Delphi
[5]	₯1,000	€2.93	Brown	Bust of Apollon of Olympia	Myron's Discobolus; Temple of Hera, Olympia	Head of the Charioteer of Delphi
[6]	₯5,000	€14.67	Deep Blue or Purple and yellow-green	Theodoros Kolokotronis; Church of the Holy Apostles, Kalamata	Karytaina, Arcadia	Bust of Philip of Macedonia
[7]	₯10,000	€29.35	Deep purple	Georgios Papanikolaou; microscope	Asclepius	Bust of Philip of Macedonia

Gallery (banknotes)

• 

  ₯5 banknote, 1912

• 

  ₯5,000,000 banknote during the Axis Occupation hyperinflation period, 1944

• 

  ₯20 banknote, 1955

Encoding

In Unicode, the currency symbol is U+20AF ₯ DRACHMA SIGN. There is a special Attic numeral, U+10142 𐅂 GREEK ACROPHONIC ATTIC ONE DRACHMA, for the value of one drachma but it fails to render in most browsers.

Restoration

The Drachmi Greek Democratic Movement Five Stars, which was founded in 2013, aims to restore the Drachma as Greece's currency.

See also

• Commemorative coins of Greece
• Economic history of Greece and the Greek world
• Economy of Greece
• Greek euro coins
• Phoenix (currency)

Notes and references

Notes

References

External links

• Overview of the modern Greek drachma – BBC.co.uk
• Historical banknotes of Greece (in English and German)

Preceded by Greek phoenix

Greek currency 1832–2001

Succeeded by euro