Bank of Greece Governor, Giorgos Provopoulos, warned Parliament on Tuesday of the risks of political uncertainty, saying that the Greek recovery program "is still fragile," as daily Kathimerini online reports.
Presenting the Central Bank's interim monetary policy program to the House on Tuesday, Provopoulos urged the government to push ahead with structural reforms aimed at boosting the economy and to avoid the imposition of new taxes as a means of raising revenue. "It is a national necessity to safeguard the achievements made so far and at such a great cost, to avert backsliding and to cover the distance that remains for the country's growth potential to be strengthened," Provopoulos told Greek lawmakers. In the report, the Bank of Greece forecasts that the economy will emerge from a six-year recession and begin to recover next year, trimming its recession forecast for 2013 to 4% from a previous -4.6%. It also projects that the country will attain a primary budget surplus this year, excluding debt servicing costs, expecting the current account balance to hit a surplus.
Yet, Provopoulos warned, a polarized political climate poses risks to the economic recovery program. He urged the country's political forces to seek common ground, especially in light of twin elections in spring for European Parliament and local and regional authorities. The situation, Provopoulos said, "calls for consensus between social and political forces on a national policy for exiting the crisis and returning to growth."
