Greece's central bank warned Wednesday that the country faced a disorderly exit from the euro and called on the country's new coalition government to step up the pace of reforms.
In its starkly worded interim monetary policy report for 2011, the Bank of Greece said the latest European Union-led €130 billion ($175.57 billion) bailout package for Greece represented a last chance for the country to make good its reform program.
Failure to do so would lead to "an uncontrolled downward trajectory that would undermine many of the achievements that have been attained in recent decades, drive the country out of the euro area and set Greece's economy, standard of living, society and international standing back many decades."
The report also painted a bleak picture for Greece's economy—now entering its fifth year of recession—forecasting that gross domestic product would shrink by 5.5% or more this year and that growth wouldn't return until 2013, with only an anemic recovery of less than 1%.
It said that Greece's government should adopt as a "national objective" the goal of generating primary budget surpluses over and above those already envisioned in budget plans, and take steps to boost economic recovery.
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