Bank of Greece Governor George Provopoulos has reiterated that the Greek economy is expected to contract by 4.5 per cent this year and that the recovery will not begin until 2014.

Provopoulos has insisted that the country must move ahead with the reforms pacted in the bailout package.

"There is no doubt that 2013 will be a difficult year," he said.

Provopoulos said that the recession should not be used an excuse to ease up on reform efforts.

"Strict adherence to the targets will ensure continued funding and eliminate once and for all the risk of exit from the euro area, attract new investment and convey a clear message that the worst is behind us," he said.

Provopoulus added that the number of non-performing loans has risen to 22.5% at the end of the third quarter from 16% in December of 2011.

Nevertheless, he assured that three bigger and stronger banks with better access to funding markets will be formed.

JM

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