Friday, February 7, 2014

Speech By Governor of Bank of Greece

"My presentation will be structured as follows. I will begin by discussing the origins of the euro-area crisis. Next, I will describe the adjustment that has taken place within the stressed countries. With Greece at the epicenter of the crisis, my focus will be on what has happened in my own country. I will then turn to some related issues, notably, the reasons for the deep economic contraction in Greece and the problem of debt-sustainability. Finally, I will discuss changes that are being made to the euro-area’s institutional set-up and their implications for the single currency’s future" - read full text here.


  1. This is classic stuff. It is just like listening to Varoufakis!!!

    1. No, this is not like listening to Varoufakis. The origins of the crisis are now old enough for the interpretation to be stated by current politicians -- and this is standard, apart from a few obsessive neoliberal dissenters. But the analysis of the current situation is politically constructed; there is little in the way of economic indicators and trends to suggest even that Greek depression is near an end. There is even less to suggest that there are any significant structural improvements in the Greek economy that would justify the policies that have been carried out by Greek governments at the behest of the Troika.

      The only thing that matters is when Greece is permitted (or its politicians manage to grow testicles) to restructure its debt. The joke that it is currently running a budget surplus is such an obvious fiction that only uneducated people could take it seriously. Yet the Governor of the Bank of Greece puts it forward as a "fact".

      This is a political speech dressed up as independent economic analysis. The Greek state continues with such nonsense, and wonders why Greek people are sick of their politicians and state institutions.

    2. Broadly speaking it is the same line that Varoufakis spins. ie the problem was caused by the "markets" and that there needs to be centralization of power.

      Yes Varoufakis and Provopoulos put a different colour lipstick on the pig. One says the government should have defaulted, the other says we are on the right track but when it come to identifying the problem and identifying the solution, they are both on the same page.

    3. Enough finger-pointing / criticism. These are typical, time-wasting comment thread tactics.

      If in your view the speech is wrong and Varoufakis is wrong, then surely it is your responsibility to state what you think is right and correct. On that basis a discussion can occur.

      We can all stand back and jeer, but it is meaningless noise....

    4. Anonymous, in this video Philipp Bagus does and amazing job of explaining the mechanisms at work in the Euro.

      The only way the Greek government was able to get in the mess it is in is because the ECB was monetising its debt.

      For the Governor of the Greek central bank to come out and say that it was the markets at the core of the problem is disingenuous.

  2. I am somewhat surprised at the passionate criticism of the speech. When I read it the first time, I was impressed. Certainly the parts 'origins of the crisis' and 'a tale of two crises' are, to me, some of the best and most concise analyses I have read so far.

    Now, I agree that in the other half of the speech, Greek patriotism as well as a political mission shine through. Yes, Greece undertook adjustments never seen before but I don't think that Greece was the shining reform light (certainly not in the first couple of years). And yes, things have stabilized for the moment, albeit at a terribly low level, but to paint the horizon as blue as the speech does is carrying optimism a bit too far.

    1. Klaus, this speech certainly is a masterpiece of rhetoric. The analysis is concise and achieves to avoid any qualification of Greek fault ;)

      One single sentence is different:

      >>"The slow pace of implementation of structural changes contributed to a rise of uncertainty, including widespread speculation of a Greek exit from the euro."<<

      To sum it up: What ever shines through is unassailable.


    2. Anonymous - Provopoulos is not going to criticize his biggest customer (the Greek government). At least not too loudly.

    3. I must be reading this speech differently from many other readers. As far as I am concerned, I saw a lot of realistic acceptence of what went wrong on the Greek side. Obviously, one cannot expect the Governor of a Central Bank to come out with straight talk and say "we messed it up". But between the lines a read quite a bit of that.

      Well, maybe I read it with my antennas set on "reception of positives" instead of "search for negatives"...

    4. This is the world we live in now. Politicians will show they understand the situation to get your trust and then they use that trust to tell you things that fit their agenda.

      For example Obama saying big government is what America was built on, saying that NSA spying is the same type of spying that the founding fathers did on the British, saying that the problem in Greece is government debt and then saying it was caused by the markets.

      It is a propaganda technique called "Half Truth"
      From wikipedia - A half- truth deceives the recipient by presenting something believable and using those aspects of the statement that can be shown to be true as good reason to believe the statement is true in its entirety,"

      Provopoulos may have a handle on the situation but if he denies the obvious then he can not be trusted.