‘Greece’s worst crisis since World War II’

The crisis affecting Greece is the first of its kind since the end of World War II and can’t be tackled with «the logic of the past,» according to Bank of Greece Governor Giorgos Provopoulos. «The current crisis in Greece is not similiar to anything we have seen in the past, at least in postwar history,» the country’s central bank chief said yesterday. The country needs to take action on the reform front or otherwise prepare to pay a huge price, he added. «This could be an opportunity to implement the needed reforms and not just talk about them, given that the cost of not implementing them would be huge.» Under mounting pressure from markets and EU policymakers to slash its large debt and deficit, Greece must prove to Brussels by mid-March that it can meet its ambitious targets or be prepared to take further fiscal measures. Provopoulos, also a member of the European Central Bank’s Governing Council, said the large debt and deficit were only partly due to the recession and mainly a result of chronic macroeconomic imbalances. «The balance of payments deficit is not sustainable,» he said. «A policy mix which will remedy the macroeconomic and microeconomic balance and improve the economy’s competitiveness and productivity is needed to restore its sustainability.» He said the economy needed a «complete restructuring,» both in terms of steady budget consolidation and reforms to boost competitiveness.

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