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Outgoing Bank Chief Says Greece Needs Growth Now

George Provopoulos now says austerity alone wasn't enough to help Greece
George Provopoulos now says austerity alone wasn’t enough to help Greece

Departing Bank of Greece Governor Giorgos Provopoulos said that the only way out of a lingering economic crisis for Greece now is growth, not just the austerity measures the government imposed, and that he backed, during a lingering economic crisis.
Provopoulos, who had wanted to stay in the job but was bumped by Prime Minister Antonis Samaras in favor of his Finance Minister Yannis Stournaras – who has already been replaced by economics professor Gikas Hardouvelis – said he had given Greece “safe haven”.
“The adjustment programs are necessary but not sufficient,” he said, referring to the big pay cuts, tax hikes, slashed pensions and worker firings implemented on orders of the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up 240 billion euros ($327 billion) in two bailouts.
“There is a need for a comprehensive national plan for growth that will have long-term aims and which will be faithfully implemented,” he said. He didn’t say why he didn’t recommend that while he was serving, nor offered any specific plans beyond ideas or telling other people to find out what to do.
Provopoulos had annually – and incorrectly- for the past few years, said Greece was on the road to recovery, giving his indirect imprimatur to Samaras when the Premier was sticking to austerity, although recently he has turned to trying to push growth too.
With social and political division still running deep, he also called for “the biggest possible consensus of politicians and social forces” over how to attain growth without bickering or playing blame games.
That could be difficult, as the major opposition Coalition of the Radical Left (SYRIZA) that opposed the austerity measures that came with the rescue packages also opposed the appointment of Stournaras to the central bank job because he supported them, at the cost of creating record unemployment and deep poverty.
SYRIZA leader Alexis Tsipras said he had wanted to be consulted on who would take over the bank job because his party won the most seats in Greece’s selection of 21 delegate to the European Parliament in Brussels.
He called Stournaras’ appointment a “provocative move by the government, which is disregarding the political balance of power and the need for consultation over such an important position.” Speaking to his party’s MPs, Tsipras again suggested that a SYRIZA administration might seek to replace Stournaras, who is due to serve a five-year term.
Provopoulos said Stournaras was “the best choice” for the role. “He is not just a theorist; he knows about banking issues better than anyone else,” he added.
Stournaras’s appointment has to be rubber-stamped by the Cabinet, and he’s already called for the appointment of a deputy to replace Eleni Dendrinou-Louri, whose term, along with Provopooulos, also expires on June 20. It is expected that Anastasia Sakellariou, the CEO of the Hellenic Financial Stability Fund (HFSF), will take up the post.
Other changes in the government include the departure of professor Panos Tsakloglou, who was Chairman of the Council of Economic Experts (CEE).
The newspaper Kathimerini said he likely he will be replaced by Emmanouil Mamatzakis, who is a Professor of Finance at the University of Sussex and was a member of the CEE a few years ago. It is thought that Samaras has sought his advice in the past.

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