the medium run. and, of course, the conversion costs between various currencies, which are quite considerable for consumers, especially in sectors such as tourism, will be eliminated. in order to fully reap these benefits, consumers should try to become familiar not only with the physical appearance of the euro banknotes but also with the new scale of values. they should try to think of monetary values, not as amounts of drachmas but as amounts of euro. on the other hand, enterprises should introduce the new currency to their everyday transactions the soonest possible and refrain from any non - transparent pricing policies that could later weaken their competitive position. one type of cost that might arise from the introduction of the euro - and which should be avoided or minimised - refers to unwarranted price increases on the occasion of the redenomination of prices as from 1 january 2002. european commission surveys reveal that euro area citizens are concerned about this possibility. these concerns are also related to the fact that familiarisation with the new scale of values - what is expensive and what is not, in euro - is a learning process that will take time and require effort, alertness and patience on the part of citizens. however, so far there is no evidence that some enterprises might try to take advantage of consumers'lack of experience and increase their prices even before the beginning of 2002. in any case, competition is expected to protect consumers from unjustified price increases, as anyone who would charge higher prices would be faced with a loss of customers. furthermore, enterprises are obliged by law to indicate prices both in euro and in drachmas, as well as to display, in their place of business, a conversion table from the drachma to the euro and vice - versa. this should help consumers become familiar with the new scale of values. rounding rules must be strictly observed. consumers, however, should be vigilant, in order to avoid any speculative increase in prices. the physical introduction of the euro is an unprecedented event in european history. its success does not hinge uniquely on concerted efforts of authorities at the european and the national level, but also on the preparation and cooperation of everyone of us. citizens and enterprises should be prudent and calm during the physical introduction of the euro and the withdrawal of the drachma, and be understanding and patient in the face of any minor problem that may arise, since short - term adjustment costs will be more than offset by significant, long

which resulted in confusion and higher uncertainty. through our reports, speeches and interviews we tried to present the true facts in a simple, easily understood manner ; to dispel misconceptions, and inform the public on the available options and their implications. the book presents an extensive discussion of the bank ’ s public interventions and positions in the crisis period and describes the actions it took to safeguard financial stability. it provides detailed information on the enhanced banking supervision carried out in this very challenging period ; on cash management and liquidity provision to the banking system ; on the implementation of resolution and liquidation measures for credit institutions ; and on the strategy for restructuring the banking system. in such a brief speech i could not cover the full spectrum of our actions during the crisis. nevertheless, i would like to discuss three topics : first, the view of the bank of greece as to what caused the crisis ; second, the bank ’ s key positions regarding the policy orientations for exiting the crisis ; third, the steps we took for safeguarding financial stability. 1. what caused the crisis in addressing the crisis, the bank of greece first assessed its root causes. of course these causes were there before the crisis, but came to the forefront with particular intensity after bis central bankers ’ speeches 2008. back in 2001 it was expected that greece ’ s inclusion in the core of european economies would act as a catalyst to accelerate its real convergence with the advanced european countries. unfortunately, these expectations did not materialise. in the years that followed, economic growth relied mainly on consumption rather than on saving and investment, while any attempts to change long - established structures met with strong reactions. public spending kept increasing, while revenue could not possibly keep pace, leading to large deficits and historically high levels of public debt, despite the unprecedented low interest rates. the political system hesitated to take decisive reform initiatives. the country enjoyed the benefits of the single currency, but failed to show that it respected the obligations arising from participation in the monetary union. the distortions in the growth model the country was following had been repeatedly highlighted by the bank of greece. its warnings however were not heeded. the country continued on its carefree path, borrowing and accumulating debts in order to consume increasingly more goods and services that it did not itself produce. with the onset of the global financial crisis the international environment drastically deteriorated, and countries with large structural imbalances were hit the most severely. as early as in late 2008, the bank was warning that the