BoG Governor Talks About Success of Greek Reforms

Governor of the Bank of Greece Giorgos Provopoulos argued in a Wall Street Journal article Monday that the implemented reforms in Greece have produced results, while underlining that the biggest challenges for the country are complacency and reform fatigue. In the article, the BoG governor suggests recent success stories coming out of Greece shouldn’t distract from the effort that is still ahead for the country, while arguing that further structural changes and reforms, as well as rearrangements in the business sector, are in order. The changes, however, will be easier to implement in an economy that is recovering, Provopoulos added. Provopoulos further mentioned that the turmoil hitting the Greek economy helped the Greek people realize that the future of the country is associated with staying in the eurozone and not by returning to the drachma, as expected by many. “According to the doomsayers, attempts to bring down the budget deficit and restore competitiveness would lead to painful and politically unacceptable consequences, while a collapse of the banking system was inevitable. Recently, however, the sirens of doom have been silenced,” Provopoulos wrote. Referring to the developments in Greece’s banking system, the governor of the country’s central bank underlined that the adjustments undertaken there are unique on a global level. “Non-viable banks that were unable to raise sufficient private capital were wound down. Throughout the Greek crisis, and, subsequently, the Cypriot crisis, all deposits in Greece were fully protected. Today, the banking sector comprises four well-capitalized, viable pillar banks and a few smaller ones,” Provopoulos wrote.

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