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. Last Updated: 07/27/2016

Greek Press Welcomes Drachma Devaluation

ATHENS, Greece -- The Greek press has welcomed the revaluation of the drachma's central parity vs. the euro, saying it heralded the start of a new era, increasing the country's chances to join the euro zone in January 2001. "The end of the drachma and the start of a new era," read the headlines of Sunday's To Vima. "In one day Greeks became richer as their assets are now worth more euros than was the case with the previous rate of 353 drachmas to the euro."

Greece cemented its efforts to join Europe's single currency after a four-hour meeting of senior monetary officials in Brussels on Saturday decided to revalue the drachma by 3.5 percent to 340.75 per euro.

"The economy is on a new course. A positive shock from the new central parity of 340.75 per euro," wrote Sunday's Kathimerini.

The paper said the drachma's new central parity in Europe's exchange rate mechanism was stronger than expected. The currency's revaluation sets the stage for fast monetary easing.

The European Union said the revaluation would support Greek authorities in their efforts to keep the economy on a path of sustainable growth with price stability.

Greece plans to apply for membership in the European monetary union, or EMU, in March. A formal decision is expected in June.

"The drachma's new central parity versus the euro is a key to the door of EMU," wrote Sunday's Eleftherotypia. The decision will help Greece meet the required convergence criteria to become the 12th member of Europe's economic and monetary union.

The paper said the revaluation will boost Greece's bond market and improve the prospects of the stock market, which will discount the eventual drop in interest rates.

Greek short-term interest rates have been kept high by the Bank of Greece in an effort to squeeze inflation lower.

The closely watched rate for 14-day deposits, which currently stands at 10.75 percent, will have to converge with euro zone levels by year-end if Greece is to join EMU.

Finance Minister Yannos Papandoniou said Saturday the revaluation will help the central bank to ensure the smooth convergence of Greek interest rates with European levels by the end of the year.