Athens News Agency: News in English, 08-07-14

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] In favour of weaker groups

[01] In favour of weaker groups

In his first speech since he took over as Bank of Greece governor last month, Provopoulos underlined the need that social benefits should not derail a fiscal consolidation program and urged that policy makers should not repeat the mistakes made during the first two oil crises in 1970 and 1980 of loose fiscal, monetary and incomes policy.

The Greek central banker said that enterprises and households should realize that income losses suffered from rising oil prices could be replaced only in the long-term and with interventions aimed at boosting productivity and competition. Provopoulos warned that no one would benefit if enterprises and households blamed each other for any income losses.

Commenting on a current credit crisis, Provopoulos said it was in full swing and stressed it was uncertain how much time would be needed to return to full credit normality. Uncertainties over the global economy is affecting the Greek economy as well and he did not exclude any downward revision of estimates over the global, Eurozone and Greek economic growth this year.

Provopoulos called for more efforts to deal effectively with macro-economic imbalances, responsible for a huge current accounts deficit, a big public debt, high inflation and unemployment rates.

?Our duty is to ensure that now that our economy suffers from external shocks we limit the negative impact of domestic factors, such as macro-economic imbalances and structural weaknesses,? he said.

Provopoulos said a decision by the European Central Bank to raise its refinance rate by 25 basis points was successful and noted that inflationary expectations were halted in the first few days after the interest rate increase.

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