Even if you aren’t the most avid reader of current events, chances are you have heard of the Greek financial crisis at some point since it began in late 2009. But even for those who read up on international finance on a regular basis, it can be difficult to understand what factors led to the onset of the financial crisis and what the financial crisis means for Greece’s economy. As a three part series, we are going to take a look at the history of currency in Greece, what led up to the financial crisis, and what has happened as of late surrounding the financial crisis. Read on for part one of this series—a look at Greek currency, starting in ancient times and leading into the most recent years.
The history of Greek currency can be broken down into a few distinct periods, the first of which being the archaic period. The first known Greek coinage was issued in either Lydia or Ionia in Asia Minor sometime before 600 BC. Some believe that the currency was introduced by non-Greek Lydians, while others believe that the coinage came as a result of Greek mercenaries wanting authenticated payments for their services in the form of precious metals. These coins were made of an alloy of gold and silver called electrum and featured various designs over the centuries, such as geometric designs, a sea turtle, and Greek inscriptions. Many Greek city-states issued their own coins, with these coins still being used in inter-city trade, much like today’s Euros and the Euro zone.
The classical period for Greek coinage began at around the 480 BC and extended into the 330 BC. The coins produced during this time were much more technical and aesthetically detailed, made of either gold or silver. Large cities typically featured their patron god or goddess on the obverses of their coins, with a symbol of the city on the reverse.
The Hellenistic period lasted from about 330 BC to The Roman absorption of the Greek world in the 1st century BC. During this time, Greek culture spread through a large part of the known world, such as in Egypt and Syria, and the various Greek kingdoms began to mass produce their own coins, typically with less intricate detail in the coins. At this time, the term drachma was used in many regions to refer to the Greek coinage. The drachma continued to be a form on coinage, becoming Roman provincial currency under the Roman Empire. However, as foreign invaders entered the region over the centuries, the drachma eventually disappeared
The Modern Drachma
Fast forward to the year 1832, and the drachma, which was used in several areas of Greece in several different denominations, is introduced as the modern form of currency in the newly established modern state. It continued to be the national form of currency until 2001 when Greece joined the Euro zone.
Stay tuned next week for a look at the factors that led up to the onset of the Greek financial crisis.