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Tax cuts should be the ultimate goal of the programme for the economic recovery of the country as stated by the chairman of the Bank of Greece George Provopoulos. The constant increase of the tax burden on citizens and businesses has a negative effect on competitiveness and economic growth. The tax base should be expanded in order to cover a larger number of people instead of burdening correct taxpayers with higher taxes.

"The tax policy needs to change and we have to convince the people that the ultimate goal of the programme is to reduce the taxes if we are consistently fulfilling our obligations," states the top banker of Greece. He insists that so fat there has been no progress in reducing the high tax burden on workers. As a result, salaries are much lower, but the cost of doing business and the costs of production remain high. This in itself is eliminating the effect of internal denomination that has come with the salary cuts in the country.

The Bank of Greece notes that the taxation of real estate is also a phenomenon that is posing serious problems to the real economy. "The biggest obstacles to the revival of the real estate market are the constantly rising taxes in recent years, the high cost of property transferral and the ongoing instability of the tax policy".

Provopoulos suggests that the government should stop cutting pensions and salaries, because the fiscal consolidation in this direction is starting to be counterproductive. The people living below the poverty line increased to 23% in 2012 compared to 2011, when they accounted for only 16% of the total population. The low purchasing power is leading to a significant reduction of VAT revenues to the state treasury and constant deviations from the budgetary targets.

According to the report of the central bank, the overall reduction in labour costs in Greece for the period 2012-2014 will reach 17.6%. This value is higher than the objective set in the Memorandum of financial support, according to which the total cost of labour in the country should have been reduced by 15%. In particular, the average gross salary in the country in the 2010-2012 period fell by 20.6% whereas the labour costs decreased by 18.5% in the same period. And the euro zone reported an average salary increase of 2.8% in the same period. With the introduction of individual labour agreements rather than collective labour agreements, the salaries in the private sector fell by an average of 20% whereas the reduction of salaries in the public sector is 10% on average.

The report of the Bank of Greece notes that the increasing child poverty is an effect of the deepening crisis. The rate of families at risk reached 31% in just one year (2010-2011) and the cases of malnourished children at schools and kindergartens is ever increasing. "The problem with the protection of children from the worst effects of the economic crisis should be the first priority of the government of Greece". After a call for help from the municipal kindergarten in Athens, the employees and management of the Bank of Greece supported the daily livelihoods of 650 of the 8,000 children attending municipal kindergartens.

The Bank of Greece reports that around 15 billion euro in deposits have returned in the country after the second election round in June 2012 and they will increase by another 15 billion euro in the next 12-18 months. Positive economic growth should be expected to recover in 2014. The recession will continue in 2013 and it is expected to reach 4.5%. "The recession was deeper than expected in recent years, which is mainly due to the way of implementation of the recovery programme, the lack of readiness (of the government), and the errors and in particular the delay in implementing the structural reforms. Anyway, the recession cannot be used as an excuse for the failure to meet Greece's obligations under the agreements with the international lenders," states George Provopoulos.