George Provopoulos, the Governor of the Bank of Greece, should not have an ounce of credibility left after recent reports in the New York Times, let alone his questionable relationship with Michael Sallas of Piraeus Bank.
Just a glance at his words, however, show how a bad situation is being made even more unbearable.
To be fair, However as I always try be, he is not the only banker whose predictions about the course of the economy stray far from reality.
Both the President of the European Central Bank and the EU’s Commissioner for Economic and Monetary Affairs Olli Rehn, are declaring – once again – that the Eurozone crisis has passed, that a systematic improvement of the economy has already begun, and that there is no possibility that one of the 18 member countries will exit the Eurozone.
Maybe those officials believe that this is only way they can earn their salaries, by making encouraging statements so obviously contrary to facts.
In essence, however, what you achieve when you do that is just an increase in the cynicism of the people of Europe, worsening the situation.
Let’s take a closer look at the pronouncements of our own Provopoulos and consider whether he is the right man for the right job. In late October of 2010 in an interview with Reuters he foresaw economic recovery by the end of … 2011.
In July of 2011 he predicted “positive growth rates below one percent in 2012 and more than two percent in 2013.” In December 2012 he stated that the recovery may start in … 2013.
If he keeps repeating those forecasts… sooner or later he will be right. But when?
Franklin D. Roosevelt declared in his inaugural address in March 1933 that, “The only thing we have to fear is, fear itself.” And so it is. Nothing drives the economy more powerfully than mass psychology, especially fear, as former Federal Reserve Bank chief Alan Greenspan also recently said.
But fear is not countered by words alone. Action is needed, like those taken by FDR – for which he was accused of being a traitor to his class.
Only strong actions lend credence to words. That is the only way there will be economic growth. And that is the only way public officials remain in power.