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Greek drachma

Drachma, pl. drachmas or drachmae (δραχμή, pl. δραχμές or δραχμαί (until 1982)) is the name of:

An ancient currency unit found in many Greek city states and successor states, and in many South-West Asian kingdoms of the Hellenistic era.
Three modern Greek currencies, the first introduced in 1832 and the last replaced by the euro in 2001 (at the rate of 340.750 drachma to the euro). The euro did not begin circulating until 2002 but the exchange rate was fixed on 19 June 2000, with legal introduction of the euro taking place in January 2002.

Ancient drachma

The name drachma is derived from the verb "δράττω" (dráttō, "to grasp"). Initially a drachma was a fistful (a "grasp") of six oboloi (metal sticks), which were used as a form of currency as early as 1100 BC. It was the standard unit of silver coinage at most ancient Greek mints, and the name 'obol' was used to describe a coin that was one-sixth of a drachma.

The 5th century BC Athenian tetradrachmon ("four drachmae") coin was the most widely used coin in the Greek world prior to the time of Alexander the Great. It featured the helmeted profile bust of Athena on the obverse (front) and an owl on the reverse (back). In daily use they were called γλαῦκαι glaukai (owls), hence the phrase Γλαῦκ’ Ἀθήναζε, 'an owl to Athens', referring to something that was in plentiful supply, like 'coals to Newcastle'. The reverse is featured on the national side of the modern Greek 1 euro coin.

Drachmas were minted on different weight standards at different Greek mints. The standard that came to be most commonly used was the Athenian or Attic one, which weighed a little over 4.3 grams.

After Alexander the Great's conquests, the name drachma was used in many of the Hellenistic kingdoms in the Middle East, including the Ptolemaic kingdom in Alexandria. The Arabic unit of currency known as dirham (in the Arabic language, درهم), known from pre-Islamic times and afterwards, inherited its name from the drachma; the dirham is still the name of the official currencies of Morocco and the United Arab Emirates. The Armenian dram also derives its name from the drachma.

Value of the ancient drachma

It is generally considered very hard or even meaningless to come up with comparative exchange rates with modern currency due to the fact that the range of products produced by economies of centuries gone by were very different from today, which makes Purchasing power parity (PPP) calculations very difficult. However, some historians and economists have estimated that in the 5th century BC a drachma had a rough value of 25 U.S. dollars (in the year 1990 - equivalent to 38 USD in 2006), whereas classical historians regularly say that in the heyday of ancient Greek (the fifth and fourth centuries) the daily wage for a skilled worker or a hoplite was one drachma, and for a heliast (juror) half a drachma since 425 BC. Modern commentators derived from Xenophon that half a drachma per day (360 days per year) would provide "a comfortable subsistence" for "the poor citizens" (for the head of a household in 355 BC). Earlier in 422 BC, we also see in Aristophanes (Wasps, line 300-302) that the daily half-drachma of a juror is just enough for the daily subsistence of a family of three.

As a rule of thumb, a modern person might think of one drachma as the rough equivalent of a skilled worker's daily pay in the place where they live (which could be as low as $1 USD, or as high as $100 USD, depending on the country). Thus, the idea of a 'handful of money' as used today and by the ancients (see above for etymology of 'drachma') pretty neatly coincide. Perhaps the most appropriate comparison is that with modern-day Athens, where a skilled worker without a university degree earns approximately €40 per day, net of taxes.

Fractions and multiples of the drachma were minted by many states, most notably in Ptolemaic Egypt, which minted large coins in gold, silver and bronze.

Notable Ptolemaic coins included the gold pentadrachm and octadrachm, and silver tetradrachm, decadrachm and pentakaidecadrachm. This was especially noteworthy as it would not be until the introduction of the Guldengroschen in 1486 that coins of substantial size (particularly in silver) would be minted in significant quantities.

For the Roman successors of the drachma, see Roman provincial coins.

Historic currency divisions

8 chalkoi = 1 obolus

6 obolus = 1 drachma

100 drachma = 1 mina (or mna)

60 minae = 1 Athenian Talent (Athenian standard)

Minae and talents were never actually minted: they represented weight measures used for commodities (e.g. grain) as well as metals like silver or gold.

Modern drachma

First modern drachma, 1832-1944

The drachma was reintroduced in 1832, soon after the establishment of the modern state of Greece. It replaced the phoenix at par. The drachma was subdivided into 100 lepton (λεπτά, singular lepton, λεπτόν).

Coins

The first coinage consisted of copper denominations of 1, 2, 5 and 10 lepta, silver denominations of ¼, ½, 1 and 5 drachmae and a gold 20 drachmae. The drachma coin weighed 4.5 g and contained 90% silver, with the 20 drachmae 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 1, 2, 5 and 10 lepta coins (with the 5 lepta coin bearing the name obolos (οβολός) and the 10 lepta, diobolon (διώβολον)), silver coins of 20 and 50 lepta, 1, 2 and 5 drachmae and gold coins of 5, 10 and 20 drachmae. (Very small numbers of gold 50 and 100 drachmae coins were also issued.)

In 1894, cupro-nickel 5, 10 and 20 lepta coins were introduced, the 1 lepton and 2 lepta having not been issued since the late 1870s. Silver coins were last issued in 1911 and no coins were issued between 1912 and 1922, during which time the Latin Monetary Union collapsed due to the First World War.

Between 1926 and 1930, a new coinage was introduced, consisting of cupro-nickel 20 and 50 lepta, 1 and 2 drachmae, nickel 5 drachmae and silver 10 and 20 drachmae coins. These were the last coins issued for the first modern drachma, with none being issued for the second.

Notes

In 1841, notes were issued by the National Bank of Greece until 1928, when the Bank of Greece was created. Early denominations ranged from 10 up to 500 drachmae. Smaller denominations (1, 2 and 5 drachmae) were issued from 1885, with the first 5 drachmae notes being made by cutting 10 drachmae notes in half. Between 1917 and 1920, the Greek government issued paper money in denominations of 10 lepta, 50 lepta, 1, 2, and 5 drachmae. 1000 drachmae notes were introduced by the National Bank of Greece in 1901, followed by 5000 drachmae notes by the Bank of Greece after 1928. The Greek government again issued notes between 1940 and 1944, in denominations between 50 lepta and 20 drachmae. During the German occupation of Greece (1941–1944), catastrophic hyperinflation and Nazi looting of the Greek treasury caused much higher denominations to be issued, culminating in 100 billion long scale (10¹⁴) drachmae notes in 1944.

Second modern drachma, 1944-1954

In November 1944, after liberation from Germany, old drachmae were exchanged for new ones at the rate of 50,000,000,000 to 1. Only paper money was issued. The government issued notes of 1, 5, 10 and 20 drachmae with the Bank of Greece issuing 50, 100, 500, 1000, 5000, and 10,000 drachmae notes. This drachma also suffered from high inflation. Later government issues were of 100, 500, and 1000 drachmae, whilst the Bank of Greece issued 20,000 and 50,000 drachmae notes.

Third modern drachma, 1954-2002

In 1953, in an effort to halt inflation, Greece joined the Bretton Woods system. In 1954 the drachma was revalued for a second time at a rate of 1000 to 1. The new currency was pegged at 30 drachmae = 1 US dollar. In 1973, the Bretton Woods System was abolished; over the next 25 years the official exchange rate gradually declined, reaching 400 GRD = 1 USD. It was officially replaced by the euro on January 1, 2002, and has not been legal tender since March 1, 2002.

Coins

The first issue of coins consisted of holed, aluminium 5, 10 and 20 lepta, cupro-nickel 50 lepta, 1, 2, 5 and 10 drachmae and silver 20 drachmae pieces. In 1973 several new coin types were introduced: unholed, aluminium 10 and 20 lepta, nickel-brass 50 lepta, 1 and 2 drachmae and cupro-nickel 20 drachmae. Cupro-nickel 50 drachmae were introduced in 1980. In 1982, the spelling of the plural of drachma was changed from drachmae (δραχμαί) to drachmas (δραχμές). In 1986, nickel-brass 50 drachmas coins were introduced, followed by copper 1 and 2 drachmas in 1988 and nickel-brass 20 and 100 drachmas in 1990. In 2000 a set of 6 Olympic games themed 500 drachmas coins was issued.

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

1 drachma (€0.0029)¹
2 drachmas (€0.0059)¹
5 drachmas (€0.0147)
10 drachmas (€0.0293)
20 drachmas (€0.0587)
50 drachmas (€0.147)
100 drachmas (€0.293)
500 drachmas (€1.47)

¹ Minted but rarely used. Usually, prices were rounded up to the next multiple of 10 drachmas.

Notes

The first issues of banknotes were in denominations of 10, 20 and 50 drachmae, soon followed by 100, 500 and 1000 drachmae by 1956. 5000 drachmas notes were introduced in 1984, followed by 10,000 drachmas in 1995 and 200 drachmas in 1997.

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