The director of Bank of Greece Georgios Provopoulos spoke in front of the Greek-American trade chamber and made dark prognosis for the development of the bank during 2009. According to him, the economic crisis is big and the stability of the financial system needs to be guaranteed because it is a mandatory condition for the success for the economic state intervention. “This is extremely important for the countries from the European Union, where the role of the central banks is big. The measures taken by the different governments were targeted towards ensuring fresh money for the economy, guarantees, and capitals for the bank system. Until now, those measures managed to prevent the financial collapse and managed to bring back the trust of investors and clients in the bank stability,” says the director of Bank of Greece.

According to the institution’s prognosis, in 2009 about 23 500 people will lose their jobs and this way the unemployment level in the country will reach 8.3%. Dark are also the prognosis about the economic activity in the country, which will decrease and as a result the Bank of Greece expects a 0% GDP growth for 2009. Relatively good are the news about the balance of trade in the country, which will improve compared to 2008 and will be formed of about 12.5% to 13% from the GDP. Last year, the commercial deficit was 14.4%. Georgios Provopoulos explained the reason with the fact that due to the crisis the import decreases faster than the export.

The policy for the expenses of the public sector has to be very strict, because the situation there cannot stand any compromises. “Greece does not have the ability to continue stimulating the public sector anymore, because of the wrong policies in the past and the delay of the unusual but healthy for the sector measures. If it wants to improve the foreign credit investment conditions, Greece needs to cope with the public expenses,” stressed the director of the central bank.

Georgios Provopoulos announced that for a second consecutive year, the internal debt of Greece passed the 3% limit of the GDP for 2008, which was included in the Maastricht Treaty. If this happens also in 2009, the country will enter the procedure for excessive debt. For the international markets this will be a sign that the reforms in the public sector are falling behind and they will act accordingly. “Nowadays, it is unacceptable to have illusions and to calm down,” concluded Georgios Provopoulos.