Garganas to resign as Bank of Greece chief

Bank of Greece Governor Nikos Garganas will step down from his post as of June 14, ending a six-year term as a member of the European Central Bank. «After 33 years of successful service at the Bank of Greece I believe that the time has come to withdraw,» Garganas told reporters in Athens after a meeting with Prime Minister Costas Karamanlis. The government hasn’t said who will replace Garganas at the helm of the country’s central bank. Kathimerini reported last week that Giorgos Provopoulos, a UK-trained economist and bank manager with close ties to Karamanlis’s ruling, conservative New Democracy party, will be named. Contacted by mobile phone today, Provopoulos said he hasn’t been informed of anything relating to a post at the central bank. Garganas, 71, the ECB’s oldest member, frequently riled labor unions in Greece with calls for moderate wage increases and to curtail early pensions. On the European Central Bank, he’s considered one of the most hawkish of the members for his stance on inflation and interest rates. «Risks to price stability have increased» and inflation will probably «remain at high levels in coming months,» Garganas said at a press conference in Athens on April 22. Educated in the UK, Garganas joined the central bank in 1975, was promoted to chief economist eight years later and made governor in June 2002. GSEE, Greece’s main trade union federation, called Garganas an advocate of «austerity and social spending cuts,» a reputation he started to build up in 1985. As an adviser to Socialist Economy Minister Costas Simitis at the time, he drew up a plan to cut government spending and boost tax revenue to reduce Greece’s spiraling budget deficit. The plan failed and Simitis was forced to resign two years later after his party dropped the measures. In 1996, eight months after Simitis was elected prime minister, Garganas was named deputy governor of the Bank of Greece. When Governor Lucas Papademos left Athens to become ECB vice president two years later, Garganas succeeded him as governor.