  Greece’s competitiveness, measured in terms of unit labour costs against those of its major trading partners, deteriorated by 30 per cent.   The erosion of competitiveness, coupled with high growth rates generated by consumption and an unsustainable fiscal expansion, led to a widening of the current-account deficit.
Upon becoming Governor of the Bank of Greece in 2008, I began to publically warn the government – in not very subtle terms – that it needed to urgently take measures to address the fiscal and external imbalances. My warnings were overlooked. Once the crisis started in late 2009, it rapidly became self-reinforcing.