He was one of many few who warned of the storm the Greek economic system was about to enter within the late 2000s.
And it is among the primary paths of the trouble made instantly after the chapter of 2010 to face up the banking system and save the financial savings of the Greeks, given political instability and questioning about Greece’s place within the eurozone.
We have now not realized the lesson from the 2010 disaster, Provopoulos mentioned
The rationale for Giorgos Provopoulos, a He died yesterday on the age of 74. A reformer, technological, with a wealthy tutorial work and all the time soft-spoken, however with none hesitation to inform the reality concerning the nation’s pathologies.
Shortly after being appointed governor of the Financial institution of Greece in the summertime of 2008, he’s on the middle of political controversy over the nation’s monetary disaster.
As he has repeatedly mentioned in his interviews, he quickly warns the outgoing authorities of Kostas Karamanlis, in addition to the official chief of the opposition and the Prime Minister on the time after the October 2009 elections, George Papandreou, concerning the threatening conditions that might be earlier than us. , attributable to excessive authorities deficits.
Nonetheless, the political system ignores the warnings and the exclusion from the markets quickly follows, marking the entry into the period of the memorandum and the troika.
The primary memorandum
As Provopoulos repeatedly advised his interlocutors, no authorities has taken by itself this system agreed by the lenders, in distinction to the remainder of the international locations within the European area involved that emerged from the disaster on the time specified.
There isn’t any doubt that the signing of the primary mortgage settlement within the spring of 2010 is a giant breath, because it eliminates the chance of disorderly chapter. In a short time, nonetheless, it seems that it isn’t sufficient.
The pre-announcement of a referendum in 2011 by the then Prime Minister George Papandreou, below the burden of social unrest and the impossibility of implementing the memorandum, is the primary main crash take a look at for the sector, evoking reminiscences of the drachma .
In the long run, no referendum is held and the emergency authorities of Loukas Papadimos is fashioned, which obtains public debt reduction by means of a second assist program.
On the similar time, nonetheless, the banks’ capital is depleted in a single day. The circumstances that Provopoulos should handle at this level are unprecedented.
Damages from debt reduction are approaching €30 billion, which primarily leaves the system with no capital base, whereas on the similar time a big outflow of deposits should be addressed.
System focus
The PSI has been finalized and the banks are quickly supported till their first recapitalization from the agreed package deal and its completion is postponed till after the spring 2012 elections.
That is when the second disaster of confidence erupts. SYRIZA emerges within the Could contest because the second get together, no authorities is fashioned and till the June election battle, mass withdrawals from financial institution accounts are recorded.
Nonetheless the Financial institution of Greece manages to maintain the banks standing and open, offering extraordinary liquidity.
As quickly because the political danger is eliminated, after the election of Antonis Samaras, with the coalition of ND, PASOK and DIMAR, the sector is able to return to normality.
In the long run, with out opening a nostril, inside two years, below the supervision of Provopoulos, the 4 teams that had been mainly saved with the assist of the loans of the troika and secondarily by personal traders, absorbed virtually the entire smaller banks, which below liquidation and subsidiaries of overseas credit score establishments leaving Greece.
The success of the enterprise has been sealed by the second recapitalization of the system in 2014, totally coated by the personal sector and calm returns for the sector.
The message earlier than he left
Provopoulos resigns as governor of the Financial institution of Greece in June 2014 and once more warns of the hazards if the populist forces of the time prevail.
In his newest Financial Coverage report, his message is evident. “Do not be complacent. The hazard is just not over.”
In that intervention he says the next: “Any reversal or reversal of the coverage adopted would result in a brand new exclusion from the markets and would return the nation to a interval of financial instability.
That danger shouldn’t be underestimated, as a result of the nation’s return to worldwide markets primarily displays the truth that markets are benefiting from the continuation of the fiscal effort and reforms.
To keep away from the dangers, restructuring and financial reforms should proceed with extra dedication in all sectors.
Financial coverage should now persuade that it isn’t complacent and that it isn’t going backwards, however that it is able to march to the top of the street: the creation of a dynamic and forward-looking economic system.”
The sequel is thought. SYRIZA and ANEL come to energy, reversing the course of restoration, which the nation entered.