George Provopoulos, the governor of the Bank of Greece, on Monday said problems in Greece had illustrated the limitations of fiscal policy as problems of debt sustainability can constrain its usefulness.

Provopoulos outlined four lessons on fiscal policy that came to light as a result of the financial crisis:

• the view that fiscal policy can be used in a flexible way to smooth the effects of shocks in a monetary union had been shown to be overly simplistic;

• rather than smoothing the