Austerity package prompts Bank of Greece directors to quit

More than a third of the Bank of Greece's senior management have walked out following the decision of the country's parliament to pass another austerity package.

A total of 45 employees have left, including seven of the central bank's directors, many of whom are taking early retirement as the latest round of spending cuts will impose wage caps on public sector staff and shrink pensions in the future. The cap is believed to be around €5,000 ($6,375) a month before tax, but a source close to the Bank of Greece said the amount will not be confirmed until February.

Among their number is Ioannis Gousios, the director of supervision of credit and financial institutions. It is understood he will be replaced by Vassiliki Zakka, who worked as Gousios' deputy before she was appointed as director of financial stability in 2011. The source said Gousios was a very reputable figure, who commanded respect internationally, but Zakka is equally "feared" and will be able to carry out the role with the necessary authority.

Some parties close to the Bank of Greece have attempted to downplay the significance of the departures, saying the average age of the staff leaving is 62 and other directors are capable of absorbing the work - with some changes likely to have taken place in any event.

Staff numbers at the Bank of Greece have fallen steadily since 2003, when 3,133 people were employed whereas at the end of 2011, the headcount was 2,136, with most of the fall in staffing coming from natural attrition as employees leave the central bank.

But Bank of Greece governor, George Provopoulosto, said in September 2012 that the wage bill was cut by 14% in the preceding two years, an act that required a "substantial" reduction in staff.

Furthermore, an additional three-year wage agreement was adopted in May 2012, which will reduce wages by an additional 17%. Provopoulosto, as well as his two deputy governors, took 50% pay cuts as part of the ‘rationalisation' process.