needs implies a shift of focus from consumption to saving, investment and exports, from statism and the perpetuation of privileges to competition and business initiative. in other words, it means a new model of consumption, entrepreneurship and public administration ; it means increasing the share of investment and exports in gdp ; reducing the share of private and public consumption ; giving a substantial boost to saving ; shifting entrepreneurial initiative to the competitive sector of production and orienting it towards the international markets ; ensuring that public administration functions in a way that does not discourage investment and does not tolerate tax evasion. a dynamic re - launch of our efforts is needed in order to give new impetus to reform policies today, the greek economy is at a watershed. progress with adjustment has been made but is still slow if debt dynamics are taken into account. what is now needed is a strong re - launch of our efforts, to make up for the delays and give fresh impetus to reform policies. the key prerequisites for this to happen are : to demonstrate in practice that the government is firmly committed to moving forward, without ambivalence and without hesitation, on the difficult path that it has mapped out. to inform the public regularly about where the economy stands, which policy goals are being pursued, what difficulties and risks are present, how much ground still needs to be covered, what the ultimate goal is and what the consequences of failure would be. to highlight clearly the benefits of the reforms, which are not only necessary, but also morally right, abolishing privileges and aiming at equal and better opportunities for all. τo reach a minimum of consensus among the political and social forces so as to ensure continued adjustment, the duration of which will extend well beyond any one government ’ s term. priorities of economic policy a ) stabilisation through measures for structural adjustment there is absolutely no doubt that speeding up the recovery and economic growth will be key to success in the years ahead. however, there will not be any recovery, if we do not address the fundamental causes that led us into the crisis : the huge swelling of public deficits and debts and the serious erosion of the country ’ s competitive position. therefore the first step towards economic growth is to stabilise the economy. as international experience has also shown, large public deficits and debts cannot foster growth ; on the contrary, they undermine it. speeding - up reforms in the public sector the stabilisation process has entered its second and most difficult phase. following acrossthe

serious challenges liquidity support through the government guarantee scheme remains necessary it is a well - known fact that greek banks did not cause the crisis, contrary to what happened in other countries, but suffered the consequences of the fiscal derailment. the downgrading of banks ’ credit ratings, consequent on the downgrading of the country, meant that banks were shut out from the markets, while they also lost a significant proportion of deposits. against this background and in order to meet their liquidity needs, banks had recourse to the liquidity support measures adopted by the greek government including a state guarantee scheme. such measures had been adopted by all eu countries in 2008 at the height of the global financial crisis. it should be recalled that under this scheme the state, for a fee, guarantees debt securities issued by banks ; it does not provide banks with cash. these guarantees enable banks to bis central bankers ’ speeches obtain liquidity from the eurosystem by providing them with eligible collateral. it should also be noted that, because of the haircuts applied, the liquidity that credit institutions can obtain using government - guaranteed securities as collateral falls significantly short of the nominal value of such collateral. the ability of banks to raise liquidity from the eurosystem by making use of government guarantees has averted a credit crunch. although nominal gdp fell by 2. 1 % in 2010, the outstanding amount of bank credit to the private sector in december 2010 remained unchanged year - on - year. given the financial environment, without the extraordinary provision of liquidity by the eurosystem the banks would have been forced to expedite the collection of their claims, cut back on loan rescheduling and reject applications for new loans even from creditworthy customers. however, the extraordinary liquidity support measures taken by the ecb and the government are temporary in nature. they aim to give banks time to adjust their business model to the new circumstances. this adjustment must be performed in an orderly manner, so as not to further aggravate the current economic downturn nor dampen the recovery, once it begins. in other words, banks must, as soon as possible, be in a position to intermediate between savers and investors relying on their own resources, rather than on the extraordinary support provided by the ecb or the state. the new conditions make it imperative for the banking sector to change its business model the banking sector, just like the economy as a whole, has found itself up against unprecedented challenges