Former Greek Central Banker Provopoulos Says Crisis Could Have Ended in 2.5 Years



provopoulos

Former Bank of Greece governor George Provopoulos spoke to the Greek Parliament’s executive committee regarding loans taken by political parties and the media in Greece. He referred to unsound political choices following the 2010 bailout that led to the GDP shrinking by 27 percent and for the Greek economic crisis to have dragged on. He said that uncertainty has caused huge problems to the economy and he questioned the necessity of the 3rd recapitalization.

Speaking to Golden Dawn Deputy Ilias Kasidiaris on the possibility of a 4th recapitalization of banks, Provopoulos said that he could not make such a prediction however, personally believed that the third bank recapitalization in November, 2015, was not necessary. Asked by Kasidiaris to state who was to blame for this, Provopoulos could not respond.

Provopoulos made insinuations regarding current Bank of Greece Governor Yannis Stournaras and his handling of the Attica Bank matter and his handling of the situation as former finance minister when the conservative National Democracy party was in power. He pointed to weaknesses in the internal monitoring of the bank system. As governor of the Bank of Greece, Provopoulos had sent letters to ministers to help solve the matter, however, it was never properly addressed by Stournaras as minister nor Attica Bank itself. When the issues that the bank faced were finally addressed there was too little done too late with a lag in progress.

Provopoulos was also highly critical of capital controls that he estimates Greeks will be paying the price of for decades to come. He stressed that the Bank of Greece was not involved in loans to political parties and the media. “The supervisory role of the Bank of Greece is limited to checking dangers regarding capital adequacy,” said Provopoulos, adding that sanctions are taken when there are weaknesses found within a bank’s internal system through fines or even recalling the bank’s license.

 


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