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Risk of Greece euro exit 'drastically reduced' says its Central Bank governor

Phew…

"It's all good..."
Image: Thanassis Stavrakis/AP/Press Association Images

THE RISK OF a disorderly Greek eurozone exit has receded substantially, Greece’s central banker said today as he urged for the aggressive pursuit of pending structural reforms.

“The risk of a Grexit accident has been drastically reduced,” Bank of Greece governor George Provopoulos said in an interview to AFP, whilst noting progress on reforms which is enabling the country to enter a “virtuous circle”.

Provopoulos, 62, called for a “more aggressive” implementation of structural reforms tied to billions of euros in EU-IMF bailout aid.

“We have quite a long agenda of things to do, regarding privatisations, reform in the product and services market, improving the tax collecting mechanism which has a number of weaknesses and so on,” Provopoulos said.

He noted that in the first phase of the programme “although the country placed emphasis on fiscal consolidation, on structural reforms the efforts were quite incomplete,” he said. “As a result, the GDP reduction was much higher than initially anticipated.”

Senior auditors from the European Union, the International Monetary Fund and the European Central Bank are returning to Greece later this month to gauge the progress of reforms.

Strikes and protests

Their report will determine whether Greece will access a scheduled slice of €2.8 billion from its international creditors due later this month.

Greece is trying to emerge from a six-year recession that has brought layoffs and public budget cuts to hundreds of thousands of Greek households.

European Union leaders agreed in December to give Greece €49.1 billion in return for additional austerity measures, breaking a six-month stalemate.

But the European Commission warned at the time that “very large” implementation risks remained.

The fiscal overhaul has sparked waves of strikes and protests, many of them violent. Another general strike has been called by unions for February 20.

But economic indicators have improved since June, when the country emerged from a period of political uncertainty capped by back-to-back elections before a coalition government could be formed.

- © AFP, 2013

Greece: Riot police storm metro depot to end strike

Read: Worst of the euro crisis is ‘behind us’, says German finance minister

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