Euro replaces Greek drachma, Europe's oldest currency

ATHENS -- Europe's oldest currency, the 2,650-year-old Greek drachma, has endured war and turmoil. Yesterday, 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 Monday, and financial institutions will begin trading in the euro 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 yesterday 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. It also served as the model for another coin, the dirham, which is still used as an expression of currency in the Islamic world today.

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 Eurozone that initially failed to meet single-currency requirements.

But with popular support for joining the euro running at 70 percent in Greece, mild nostalgia at the loss of the drachma is tempered with feelings of pride for Greece's economic success.

"Today, I signed the last trading package in drachmas, and I felt that was the end, that that was it," said Panagiotis Alexakis, president of the Athens Stock Exchange. "But we are entering a new era, it is a move for the best."

But while yesterday 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 2002. Officials aim to gradually phase out the drachma by March 2002.