His job is to assess the state of Greek economy, report on it to the parliament and the prime minister and occasionally do it on the road. Bank of Greece governor Giorgos Provopoulos was in London on Friday to report on the state of the Greek economy, taking part in a series of lectures of the Monetary & Credit Golden Forum in the City.
He gave his speech in front of 140 members of the City investment and banking community and he didn't sugarcoat it. He said that while it was showing a small positive rate of development, the economy is still fragile and sensitive to negative developments in the euro zone.
The fact that Greece has had to undergo one of the biggest fiscal adjustments any troubling euro zone country ever following the IMF program, was the centerpiece of Mr. Provopoulos' speech. He pointed out that although austerity measures were equivalent to 30% of the GDP, measures implemented this year would, according to his estimates, rise above the 1.5% of the GDP threshold.
He noted that the economy's lost competitiveness has been restored since late last year, leading to a spike in exports and info-tech. Regarding the Greek banking system, he mentioned that its restructuring was “huge”. The first part was ensuring liquidity and capital efficiency, second part -in full spin at the moment-, is the implementation of a new business model for better efficiency.
Concerning transparency, the governor revealed that a code of ethics to rule bank – borrower relations is being drafted and will be implemented in 2015. Its target is to regulate payments of loans not being serviced without applying too much pressure on the borrowers.
Finally, asked about the sustainability of the Greek debt, he repeated prime minister Samaras' point, that he hoped the Eurogroup would make good on its promise to readjust the debt burden as soon as the country's primary surplus is established.