ECONOMY

Bank of Greece proposes Provopoulos as new chief

Greece’s central bank yesterday proposed an economist with hands-on banking experience as its new governor and European Central Bank Governing Council member. Giorgos Provopoulos, 58, formerly chief executive at Greece’s fourth-largest lender Piraeus Bank, will lead the Bank of Greece for a six-year term, taking over from Nikos Garganas, 71, who steps down on June 14. The proposal of Provopoulos by the monetary authority’s general council yesterday effectively sealed the change of guard. The Cabinet is expected to rubber-stamp the appointment. «The general council of the Bank of Greece… decided unanimously to propose to the Cabinet the appointment of Mr Giorgos Provopoulos as governor for a six-year term,» the central bank said in a statement. Provopoulos has not given any indication of his stance on European Central Bank policy but associates say he does not view issues in black and white, rather seeing economic life as more complex. «He is not dogmatic but seeks a balanced vision,» said a close associate who declined to be named. Analysts say the change of guard comes at a challenging time for Greece, which has been growing fast since it joined the euro area in 2001. Apart from the global slowdown, Greece’s economy – about 2.5 percent of the eurozone – needs to come to terms with chronic woes, including a bloated current account gap, weakening competitiveness, an aging population and stubborn inflation. Leadership crucial Leadership at the Bank of Greece will be crucial in shaping the agenda, convincing political parties to sit down and find consensus on what must be done in terms of structural reforms for the economy’s long-term well-being. Banking supervision will also be important as further consolidation in the country’s banking sector is inevitable. «The choice of Provopoulos comes at a time of increased supervision needs,» said an economist who did not want to be named. «I believe he will further upgrade the system of supervision, his academic background is coupled with market savvy and prior experience at the central bank.» In June 2000, six months before Greece joined the euro, Provopoulos wrote that the new vision for the country should be to converge with its euro partners in real terms. The new beginning would need to be coupled with structural reforms. An economist by training, Provopoulos is no stranger at Greece’s monetary authority. He served as deputy governor in 1990-1993 and was a strong advocate for Greece joining the eurozone. He was also chairman and chief executive at Greece’s fifth-largest lender Emporiki Bank in 2004-06 and oversaw the bank’s sale to Credit Agricole in 2006. After the successful privatization, Provopoulos joined top management at Piraeus Bank. Greece’s central bank governor and two deputy governors are appointed by the Cabinet after it considers a proposal by the Bank of Greece’s general council. The central bank’s council also proposed Helen Louri as deputy governor to replace outgoing Nikos Paleokrassas. Louri, an economist, is the prime minister’s economic adviser. (Reuters)