Former BoG President: Greece Never Had a Bailout Plan



provopoulos

Former Bank of Greece president Giorgos Provopoulos said in a television interview that Greece had no clear bailout plan from the beginning and that in 2012 there was a “plan B in case of a bank panic.”

Provopoulos said that Greece’s bailout was a “wrong mix” of measures from the start, claiming that two-thirds of the reforms must come from expense cuts and the other third from expanding the tax base and tackling tax evasion. He also said that the Greek government never took any initiatives and as a result all measures were instructed by the troika of international lenders.

The former BoG chief was also critical of the international creditors saying that in many cases the measures they proposed were very austere and that their representatives had no grasp of Greek reality.

According to Provopoulos, the Bank of Greece made plans that were “similar to what we saw in Cyprus, where people could not withdraw as much money as they wanted.” He claimed that there were “some circles” that encouraged Greece to abandon the Eurozone, but could not predict what would happen should Greece have followed through. He also admitted that two air transfers of cash were carried out in secrecy, to avoid causing a panic.

Regarding taxation, the former central banker expressed his belief that in light of troika proposals, the Greek government did not want to cut salaries in the public sector or proceed with mass layoffs, so they chose to impose more taxes. As a result, economic growth “became increasingly distant.”

Finally, Provopoulos was very critical of the Greek government saying that the policies followed led to the current situation. “Many believe that the bailout is the problem and not the reasons that led us to it. The country followed policies that led this to happen. For many years Greek politicians praised the benefits of Europe and concealed the obligations,” Provopoulos said.


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