##played the connection between monetary policy and inflation, were at their peak. in greece, during the second half of the 1970s and the 1980s, the central bank conducted monetary policy under difficult circumstances, as the policy mix was often inappropriate. compounding the difficulty of the bank ’ s task was the fact that the financial system operated under a complex framework of rules and provisions, which proved not only ineffective, but also distorted credit allocation and limited the scope for conducting an effective monetary policy. the abolition of the currency committee in 1982 and the transfer to the bank of greece of its functions in the fields of monetary, credit and exchange - rate policies as well as banking supervision marked the beginning of a new era in the bank ’ s history. with broader responsibilities, beginning in the mid - 1980s and until the mid - 1990s, the bank of greece undertook the leading role in the deregulation of the financial system. financial liberalisation was a gradual process, however, so that the lifting of controls could take place in tandem with the restructuring of the economy and thus avoid the potentially destabilising effects of abrupt and sharp reversals of international capital flows. this strategy proved wise ; in the 1990s many asian economies, which had not given sufficient consideration to sequencing, were exposed to severe financial crises. after financial liberalisation in greece had been completed in the mid - 1990s and up to entry into emu and the adoption of the single monetary policy in january 2001, the bank of greece had at its disposal more effective and flexible market - oriented means of monetary control and was able to react quickly and effectively to changes in economic conditions. the supervisory functions of the bank have also changed considerably, shifting from the task of ensuring commercial banks ’ compliance with credit and exchange controls and regulations, to the monitoring and the evaluation of bank asset quality, and the solvency and capital adequacy of these financial institutions. during the late 1980s and the 1990s, a substantial shift occurred in thinking about the role of the central bank in the economy. experience of past episodes of hyperinflation in various countries, as well as of moderate inflation, exemplified in the breakdown of the bretton woods system, led to the finding that monetary policy is not necessarily independent of the government of the day. sometimes central banks have to finance government spending and this results in higher inflation and, ultimately, lower growth. thus, the views that the goal of monetary policy should be to provide price stability and that the central bank should be made an independent institution

reform program that is implemented in greece since 2010, besides correcting fiscal imbalances, is the improvement in competitiveness, the re - orientation of economic activity towards exports of goods and services and the improvement in the institutional framework and business environment in order to attract fdi and to boost the long term prospects of the greek economy. despite delays and mixed signals occasionally provided by domestic policy makers, there has been significant progress in terms of the export performance in recent years. • for example, nominal exports of goods and services increased by 29. 4 % in cumulative terms from 2009 to 2014 ( while imports declined by 12. 4 % ). this development reflects the significant rise in exports of goods ( 54 % in nominal terms ; bis central bankers ’ speeches 31 % in real terms ) which increased in line with our euro area peers, while the performance of services was rather sluggish ( on account of global factors that affected the shipping sector until late 2013 and uncertainty that impacted tourism until mid - 2012 ). • net exports have been positively contributing to economic growth in the period 2010 – 2014 and are expected to continue so in the coming years. • moreover, the share of total exports to gdp has increased from less than 20 % in 2009 to more than 30 % in 2014 and greece ’ s export share in global trade has increased by 30 % over the same period. however, exports as a share of gdp are still low compared to the european average of 44 %. 2. are current sovereign debt levels unsustainable? how can these be addressed whilst maintaining the support of national populations, and who should bear the burden? it is true that most advanced countries have seen their government debt to gdp ratios rising during the global financial crisis. this reflected their efforts to address financial sector vulnerabilities and to take discretionary action or let automatic stabilizers operate in order to contain the effects of declining economic activity during the great recession. however, most of the countries, including greece, initiated fiscal adjustment programmes in order to correct fiscal imbalances and to address the debt overhang problem. in fact, greece has done one of the biggest fiscal consolidations among developed economies during peacetime with cyclically adjusted deficts declining by more than 16 % of gdp within four years. although rising debt - to - gdp ratios are and should be a cause of concern for all countries because they can undermine economic growth, economic history and recent research ( by the oecd, the bis, and the imf )