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June 11, 2014 11:49 pm
The decision was announced on Wednesday as Mr Stournaras flew to Berlin for a meeting with Wolfgang Schäuble, the German finance minister, arranged more than a month ago. Talks were expected to focus on ensuring the sustainability of Greece’s public debt, which the International Monetary Fund says will peak this year at 174 per cent of national output – a record for a eurozone member-state.
Mr Stournaras, a UK-trained economist who began his career as a researcher at the central bank in the 1980s, will take over the top job on June 19 when the incumbent, George Provopoulos, is due to step down.
A tussle over the Bank of Greece job risked a split in premier Antonis Samaras’s fragile coalition government since Mr Stournaras was backed by the premier but opposed by Evangelos Venizelos, the deputy prime minister who lobbied for Mr Provopoulos to serve an unprecedented second term.
Mr Provopoulos, a former commercial banker, averted a potentially disastrous run on Greek banks at the height of the eurozone crisis but has since faced criticism for allowing banks to delay write-offs of non-performing loans, which account for more than 40 per cent of total lending.
The decision went down to the wire as Mr Samaras scrambled to find a replacement for Mr Stournaras who would be acceptable to the “troika” of European Commission, IMF and European Central Bank officials monitoring Greece’s international bailout.
Gikas Hardouvelis, chief economist at Eurobank, a private Athens lender who worked alongside international officials on Greece’s sovereign debt restructuring in 2012, was sworn in as finance minister on Tuesday after Mr Venizelos gave his approval.
Mr Provopoulos said on Wednesday he felt “no bitterness” at being passed over for a second term and praised Mr Stournaras as a “good choice” for governor.
“I feel liberated . . . and proud of what we achieved. These past few years were very difficult and we had many sleepless nights since we didn’t know what monetary situation we might wake up to the next day,” Mr Provopoulos said, recalling a tense period in 2012 when it seemed likely that Greece would crash out of the eurozone.
Mr Stournaras’s first tasks as governor will be to prepare for new stress tests of eurozone banks to be conducted by the European Central Bank this year and address the problem of bad loans across the sector.
The IMF warned in its latest report on Greece’s reform progress that the four systemic banks may need another €6bn in fresh capital, on top of €8.5bn raised this year on international capital markets, to “deal robustly with high non-performing loans and pave the way for economic recovery.”
Poul Thomsen, the IMF chief of mission for Greece, said: “A major concern is the very high level of loans that are not performing, including restructured loans that are considered to have a very high risk of becoming non-performing again.”
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