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Immediate formation of primary budget surpluses at levels higher than the planned values and stimulation of rapid economic growth are the conditions the Governor of Bank of Greece, George Provopoulos, has placed in order for the country to remain in the monetary union. There is no room for increasing the tax burden in Greece and the condition for success is to improve tax revenues through collecting evaded taxes rather than raising tax rates. "The implementation of the decisions of October 26 is the last chance for Greece to remain in the Eurozone. New delays and deviations from the economic goals should be avoided and all efforts should be concentrated upon meeting and surpassing them," said the major banker, when handing the President of Parliament, Filippos Petsalnikos, the central bank interim report on the development of the local economy.

Provopoulos insisted that Greece is currently experiencing the most crucial times of its recent history and is facing a serious dilemma - how to resolve the current debt crisis. If the country were to announce an uncontrolled bankruptcy, it would lose all the privileges and social benefits achieved after the military dictatorship. This would take the country outside the Eurozone and the international community. Greece would lose its positions and be thrown decades back. According to Provopoulos, it is extremely important to coordinate the efforts within the Eurozone in close cooperation with the European partners and the international community to achieve a rapid and coordinated reduction of the foreign debt and lay solid foundations for economic recovery.

"Efforts will surely come at a cost, but the cost to society in the medium term will be lower, while in the long term, benefits will be much greater." This is how the Governor of the Bank of Greece determined the need for painful reforms like job cuts in the public sector, cuts in budget expenditures and closure of inefficient state enterprises, which will help reduce the deficit.

Provopoulos pointed out that the main task of the newly formed coalition government of Lucas Papademos is to regain the shaken confidence in the ability of Greece to recover. State leaders should immediately implement all the arrangements of the summit of October 26 to continue the auxiliary funding of the country. A clear signal to Europe that Greece is on the right track would be to limit recession, achieve the most rapid rate of recovery and create real conditions for economic growth in the coming months, if not weeks. It would also be desirable to encourage private business, which today is particularly influenced by the negative effects of reduced demand, lower competitiveness, slowed credit growth and increased tax burden.

As for the preparation of the new national tax system, the report indicates that imposing new tax burdens should be avoided, especially for individuals, because it may be counterproductive and ultimately, tax revenues could fall dramatically, rather than increase.

Regarding the local financial system, Provopoulos stated that the general macroeconomic conditions have deteriorated and this is leading to greater uncertainty. This has had an adverse impact on deposits and the quality of the loan portfolio of banks and limited the additional access of local financial institutions to the interbank market. To the overall severe macroeconomic environment is added the additional burden of reduced face value of government bonds held by individuals, which further hinders the healthy survival of banks.
  
"Under these circumstances, the stability of the banking system under pressure requires strenghtening their capital base, their balances and to reform the business model of banks. The creation of larger and more powerful formations is a necessary step in the process of restructuring the banking system and allows banks to successfully establish their mediation role in facilitating economic recovery."