Euro cash changeover
On 1 January 2002, euro banknotes and coins were introduced in 12 countries with a total population of 308 million citizens.
It was the world's largest ever monetary changeover involving the banking sector, security carriers, retailers, the cahs-operated machine industry and the general public.
The changeover was finalised in two months. National banknotes and coins ceased to be legal tender at the end of February 2002.
Five years later, and after Slovenia became the 13th euro area country on 1 January 2007, 316 million people were using the euro as their currency.
As of 1 January 2008, after Cyprus and Malta joined the euro area, this number rose to 317 million people.
The successful development of the euro is essential to the realisation of a Europe in which people, services, capital and goods can move freely.
Preparation of euro banknotes and coins
The name of the single European currency was adopted by the European Council at its meeting in Madrid on 15 and 16 December 1995. At this meeting it was also decided that the word "euro" would be inscribed on euro banknotes in both the Latin (EURO) and the Greek (ΕΥΡΩ) alphabets.
The symbol of the euro, "€", is inspired from the Greek letter epsilon and is the first letter of the word "Europe". The two parallel horizontal lines represent the stability of the euro.
In February 1996 the European Monetary Institute (EMI) launched a euro banknote design competition. In December 1996 the EMI Council selected the winning design series amongst 44 proposals. An international jury of renowned experts in marketing, design and art history participated in the selection process and, at the same time, a public survey was conducted in the EU 14 Member States.
In 1998 the Governing Council of the ECB approved the final designs. The winning series was the work of Robert Kalina, a banknote designer from the Oesterreichische Nationalbank in Vienna.
The production of euro banknotes began in July 1999, after a series of preparatory stages.
Each National Central Bank (NCB) was responsible for deciding where to print the initial supply of banknotes required in its respective country.
The designs of the common side of euro coins were selected in 1997 among proposals submitted by all EU countries. Luc Luycx of the Royal Belgian Mint won the competition to design the common side of the coins.
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Adoption of euro in Greece
Greece joined the euro area on 1 January 2001 following the decision of the ECOFIN taken during the EU Council meeting that was held in Portugal on 19 and 20 June 2000.
The irrevocable conversion rate of the drachma vis-a-vis the euro was set at:
1 euro=340.750 drachmas.
Since 1 January 2001, the Bank of Greece has become a part of the Eurosystem, which comprises the European Central Bank (ECB) and the National Central Banks of those countries that have adopted the euro.
The Bank of Greece, in cooperation with the Ministries of National Economy and Finance, the Hellenic Bank Association as well as an ad hoc committee (GRECO task force) established at the ECB have all contributed to the successful introduction of the euro.
1. The adoption of the euro in scriptural form
The adoption of the single currency by Greece (1 January 2001) marked the start of the "transitional period" in which the euro could only be used in scriptural form and the domestic market formed part of the integrated euro area market.
During the "transitional period" monetary policy was conducted in euro, credit institutions' current accounts with the Bank of Greece were denominated in euro, and all transactions in the interbank money market were carried out in euro.
However, fiscal policy operations (i.e. government receipts and payments) were carried out in drachmas, although key government accounts were expressed in euro, too. The 2002 government budget was denominated in both currencies. New issues of government securities were denominated in euro, whereas outstanding past issues were re-denominated.
The "transitional period" lasted one year and ended on 31 December 2001, simultaneously with the other 11 EMU countries, when the euro was introduced.
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2. The Introduction of the euro
On 1 January 2002, euro banknotes and coins were put into circulation in Greece, simultaneously with the other euro area countries. The euro cash changeover was completed on 28 February 2002.
The introduction of euro banknotes and coins required detailed planning at logistical level. Special emphasis was put on the preparation of the banking sector and the retailers, as they constitute the main channels through which euro banknotes and coins are put into circulation.
The cash changeover in Greece was finalised successfully. The Greek public became quickly acquainted with the euro and, by the first week of January, the largest part of transactions was conducted in euro.
The share of euro banknotes and coins in total banknotes and coins into circulation was substantial, consistently higher than the euro area average.
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In order to ensure the smooth functioning of the market during the first days of 2002, the Governing Council of the ECB decided to allow the frontloading of euro banknotes and coins to credit institutions and retailers.
3.1. Frontloading to commercial banks and retailers
Pursuant to the provisions of Law 2948/2001, which specified the frontloading framework for Greece, the Bank of Greece supplied commercial banks with euro coins as from 1 September 2001 and with euro banknotes as from 1 October.
The frontloading of euro coins to banks started earlier, as the transportation of coins is more difficult due to their large volume and weight.
The banks, to which the Bank of Greece had frontloaded euro coins and banknotes, sub-frontloaded to retailers euro coins from 1 November 2001 and low-denomination banknotes (€5 and €10) from 1 December. As from the same date, retailers could receive euro coin packs of a value ranging from €111 to €300. Banks and retailers undertook not to put euro banknotes and coins into circulation before 1 January 2002.
3.2.Familiarisation of the public
The National Cash Changeover Plan provided for the frontloading to the public, as of 17 December 2001, of starter kits containing 45 euro coins of all denominations worth 5,000 drachmas (€14.67).
4. Dual circulation
From 1 January to 28 February 2002 euro banknotes and coins circulated in Greece in parallel with drachma banknotes and coins (dual circulation period). Non-cash transactions (cheques, remittances, credit cards etc.) were conducted in euro only.
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5. More information
Council Regulation (EC) No 1478/2000 of 19 June 2000 amending Regulation (EC) No2866/98 on the conversion rates between the euro and the currencies of the Member States adopting the euro,
The National Cach Changeover Plan
Council Decision (EC) No 427/2000 of 19 June 2000 in accordance with Article 122 (2) of the Treaty on the adoption by Greece of the single currency on 1 January 2001
The introduction of euro banknotes and coins – one year after; Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee, the Committee of the Regions and the European Central Bank
Communication from the Commission to the European Council-Review of the introduction of euro notes and coins
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The information campaign aimed to ensure that both the public and professional cash handlers were familiar with:
- the denominations of euro banknotes and coins,
- the visual appearance of euro banknotes and coins,
- the security features,
- the changeover modalities.
The Bank of Greece as well as other public and private organisations launched information campaigns on the cash changeover with a view to raise public awareness.
The Bank of Greece also participated in the "EURO 2002 Information Campaign", along with the European Central Bank and the National Central Banks of the other 11 euro area countries.
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