Bank Of Greece Governor Calls For Political Stability

George Provopoulos, (Photo Wikipedia)

Greece is expected to return to growth in 2014, the Bank of Greece (BoG) said in its interim report for monetary policy on Tuesday. According to the report, tabled in parliament by BoG governor George Provopoulos, Greece's GDP is expected to grow by at least 0.5 percent in 2014, while unemployment should drop by one percentage point.

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However, Provopoulos warned of risks and uncertainties due to the polarized political climate, underlining the importance of a stable economic policy focused on structural changes. He also said that fiscal adjustment cannot rely anymore on tax increases and that tax payers should be relieved. He also recommended speeding up efforts for restructuring the public sector through shutdowns or mergers of public organizations and businesses, imposing better expenditure control mechanisms for both public entities and social security funds so as to ensure the sustainability of the pension system, the reform and modernization of the judicial system as well as improving tax administration and tax collection mechanisms for combatting tax evasion and establishing a climate of social justice.

The Bank of Greece governor also stressed the need for speeding up privatisations to boost the business climate and attract foreign investments. Regarding developments in the banking system, a dispatch from the state news agency noted Provopoulos as saying that following recapitalization, banks will have enhanced credit ability in the medium term.