Greek bank chief warns against quitting euro

Debt-wracked Greece will face a "real nightmare" if it forsakes the euro for the drachma, its old currency, the head of the central bank said in an interview published Saturday. "Any possible return to the drachma will be a real nightmare at least for the first few years," George Provopoulos told the Kathimerini newspaper. He also denied speculation of any such move, saying it would take years of preparation like the euro, which was launched a decade ago. If Greece were to return to the drachma, it would take years to achieve stabilisation and "progress achieved over decades will be wiped out," he warned. "I am convinced that Greeks will mobilise in the national effort to return as soon as possible to the path of social and economic progress within the eurozone," he added. Greece is slogging through a fourth year of recession that has seen its economy shrink by a cumulative 15 percent, bringing unemployment to almost 18 percent of the workforce -- more than 800,000 people. An economic recovery plan dictated by the European Union and the International Monetary Fund has brought further hardship for Greeks in pay cuts and tax hikes. Greece has been allocated two bailouts totalling 240 billion euros ($314 billion) -- including 30 billion to recapitalise banks -- and has so far drawn 73 billion euros from that total. However, the possibility of Greece leaving or being forced out of the eurozone is no longer an idea entertained only by the lunatic fringe. German Chancellor Angela Merkel and French President Nicolas Sarkozy warned Greeks in November that this would be the result if they didn't quickly accept new bailout conditions -- triggering compliance but renewed market unease. The British weekly The Economist, which has long argued Greece will end up eventually defaulting on its massive debt, recently organised a conference in Athens on a possible exit from the eurozone.