Greece Adopts the Euro: What Happened
On 1 January 2001, Greece joined the eurozone, becoming the twelfth member of the European Union to adopt the euro as its currency, and on 1 January 2002, euro coins and banknotes replaced the drachma in everyday use. The drachma, whose name dated back to ancient Greece, had been the currency of modern Greece since 1832. Greece had not qualified to join the eurozone when the euro was launched in 1999, because its inflation and budget deficit were too high. The government of Prime Minister Costas Simitis carried out economic reforms to meet the criteria, and Greece was admitted in 2001. Membership brought lower interest rates, cheaper borrowing and a period of strong economic growth. Greek euro coins feature designs linked to Greek history and culture, such as the owl of Athena and the myth of Europa. However, it was later revealed that Greece's budget deficit figures had been significantly understated. When the global financial crisis struck in 2008, these weaknesses led to the Greek debt crisis, which raised fears Greece might leave the euro.
Frequently Asked Questions
When did Greece adopt the euro?
Greece joined the eurozone on 1 January 2001, and euro coins and banknotes replaced the drachma on 1 January 2002.
Why didn't Greece join the euro in 1999?
Greece did not qualify when the euro launched in 1999 because its inflation and budget deficit were too high.
What was the drachma?
The drachma was the currency of modern Greece from 1832 until 2002. Its name dates back to ancient Greek coins.
What designs are on Greek euro coins?
Greek euro coins feature designs from Greek history and culture, including the owl of Athena on the one-euro coin and the myth of Europa on the two-euro coin.
How did the euro affect Greece?
It brought lower interest rates and strong growth at first. However, understated deficit figures and debt later led to the Greek debt crisis.
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