Greek hopes high as euro takes hold

Greeks love the euro, but still prefer to pay in drachmas

By the BBC's Paul Wood in Athens

On the stroke of midnight, New Year's Eve, Greek Prime Minister Costas Simitis performed a solemn ceremony deep inside the national bank - using his bank card to withdraw the country's first euros from a cash dispenser.

We're now part of a united Europe

Costas Simitis

It was the signal for revels to begin at a string of euro-parties in all the major cities in Greece.

The new currency had its first use in casinos and in the "lucky coin" which bakeries put into traditional New Year's cakes here.

But how is the euro now doing in the wider Greek economy?

Greek newpapers celebrated the euro launch, but warned of troubles ahead

There have been mixed results. Some shops in my district in northern Athens were unable to give change in euros because of a shortage of coins.

One street kiosk even refused to take payment in the new single currency - the stallholder said she did not have a calculator to convert the drachma prices.

Taxi drivers in Athens are complaining they will not have time to fit new meter by the time all transactions are in euros, in March.

The headline in one Greek newspaper Ademeftos Typo was simply "Euro troubles! Now the difficulties begin."

A lot of shops have been rounding prices up. "At the mercy of profiteers", was the headline in Sto Karfi.

Painful reforms

Greece was the last county to make it into the eurozone - it was a year behind the others because of problems in getting inflation and the national debt under control.

Simitis: Credited with reviving the economy

There has been some painful economic reform - and the government is warning of more to come.

But Greeks are generally enthusiastic about the euro - as they are for the project of "ever closer union", in general.

After all, Greece has benefited from billions in subsidies from Brussels since it joined the European Community 20 years ago.

The euro has introduced complete price transparency and revealed Greece as a very cheap holiday destination.

High expectations

This will be vital for the Greek economy, which relies on tourism.

Despite reforms Greece remains the EU's poorest member

However, Greeks are more painfully aware than ever before that they are also the EU's poorest member state, bottom of the league for average earnings.

Average annual wages in Greece are around the 20,000 euro mark.

There will be huge expectations here that the euro will deliver a better standard of living for the Greeks, and that will require a buoyant, expanding economy.

It remains to be seen whether the interest rate which suits Paris, Bonn and Brussels is also right for Athens.