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Illustration of George Provopoulos. Govenor of the Bank of Greece.

ANTHONY JENKINS/The Globe and Mail

The term Greek "crisis" is so overused that it has lost all meaning. A genuine crisis arrives quickly, inflicts enormous damage, and is usually resolved equally quickly because the alternative is even more damage. Greece? It is still intact, more or less, after five years of economic hell, and has not left the euro zone.

Yet few Greeks realize just how very close the country came to outright collapse. The "crisis" – one that fits the classic definition of the word – came in the weeks before the June, 2012, general election, when it appeared that the anti-austerity radical left coalition, Syriza, would capture the imagination of recession-weary Greek voters. In reaction, the exodus of deposits from the Greek banking system went from a steady trickle to a gusher. A bank run was under way and the Governor of the Bank of Greece, George Provopoulos, was scared.

Over lunch, I asked: Was there a point when you became seriously worried that the banks would fail?

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"Yes," he replied.

The handsome 1930s Bank of Greece building in central Athens is surrounded by the gutted remains of buildings torched in the infamous riots of February, 2012. We had lunch in the sixth floor dining hall, where there was no hint of austerity or recession. The sun was blazing and the view of the Acropolis was magnificent. The table linen is white and crisp, the silver polished. The blue napkins, emblazoned with "TE," for Trapeza Ellados (Bank of Greece), provided an elegant splash of colour.

Around us are some of Greece's finest modern oil paintings, all part of the bank's vast art collection, which includes ancient Macedonian coins, medieval religious books and a restoration laboratory to keep them all in top shape. Overlooking our table is a large, powerful oil called "The landing of Karaiskakis at Faliro," the work of Konstantinos Volanankis in 1895. It describes the landings of Greek freedom fighters to break the Ottoman siege of the Acropolis (the Greeks lost) and I wondered whether Mr. Provopoulos felt besieged last year. He did.

Our appetizer, served on china plates with such heft they could be used as body armour, is spinach topped with octopus, sprinkled with lemon juice. As I ate, he explained that the banks' deposit exodus began in late 2009, when Greece, which had admitted it had been fudging its debt and budget deficit figures for years, was hurtling toward its first bailout. On average, the system was losing €4-billion ($5.36-billion) a month.

The deposit exodus turned critical in the last week before the election of June 17, only a month after the inconclusive first election. On one day, the equivalent of 1 percentage point of gross domestic product – about €2-billion – vanished. "It was a huge challenge for us," Mr. Provopoulos said. "We had to equip all the commercial banks with the necessary quantities of bank notes so the banks could serve their clients."

To meet the withdrawal demand, a fleet of trucks shuttled banknotes from Bank of Greece vaults to bank branches throughout the country. The resupply rate just ahead of the election was running at three times the already high previous rate. The European Central Bank helped by injecting liquidity into the Greek banks and ensuring that the Bank of Greece had all the banknotes it needed to keep commercial bank branches and ATMs alive.

Mr. Provopoulos was prepared for the worst. "I was much more afraid because I knew everything; I had the data in front of me," he said. "If this phenomenon had gone on, there would have been no reason but to go into a full bank run. That would have resulted in the exit of the country from the euro area."

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Syriza did not win the election, though it placed a close second in the popular vote. The winner was the centre-right New Democracy party, led by Prime Minister Antonis Samaras, who did what his European Union and the International Monetary Fund paymasters told him to do: Keep austerity measures intact.

The deposit exodus slowed, then reversed. The Greek banking system was saved, sort of. A savage consolidation exercise would come next. It will see Greece's seven banks merge into three biggies, with a few smaller ones on their flanks. The effort is about 75 per cent complete.

Mr. Provopoulos, 62, has seen more front-line action than any other European central bank governor since Greece triggered the debt crisis. He left Piraeus Bank, where he was CEO, to join the central bank in June, 2008, three months before the collapse of Lehman Brothers.

I asked him about the curious timing of his exodus from the commercial banking world. Did he know a bank-wrecking global financial crisis was nigh? "The main reason I took this position was because I looked forward to the big challenge [as central bank governor]," he said. "I did not expect the crisis to reach such depths."

In retrospect, his timing could not have been better. The Greek banks were all but destroyed in the financial crisis and the grinding recession that continues today. The €3.4-million severance package awarded to him by Piraeus Bank would be impossibly lavish today.

The uniformed waiter brought us rack of lamb and puréed potatoes – delicious – and we drank rather pleasant Greek wine. The boozy lunch is still alive in Europe.

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Mr. Provopoulos is very much the banker, though one who never lets you forget his professorial roots. He speaks slowly and deliberately, using stock economic terms, like "challenges," and is fond of asking rhetorical questions that he goes on to answer himself.

He studied economics and received his master's and PhD degrees from Britain's Essex University. He spent the early part of his career as an economics professor, briefly worked for the central bank in the early 1990s as deputy governor, then switched to the commercial banks, where he held management positions at top Greek banks, including Piraeus, Alpha and Emporiki.

While he is not a political figure, he never shied away from criticizing the slow-motion pace of various governments' structural reforms that were designed to make the economy more competitive. "Fiscal consolidation meant more taxes and less spending, and that means you depress the levels of economic activity," he said. "Structural reforms are the only way to counteract. By neglecting to fully implement structural reforms, we were not able to receive all the benefits."

His six-year term as bank governor ends in June, 2014. When we talked on the last day of February, he seemed pretty certain that the worst was over for Greece and its banking system; Finance Minister Yannis Stournaras recently said the economy could return to growth in the fourth quarter (though Mr. Provopoulos thinks that forecast is a bit ambitious).

He said he doesn't know what he wants to do next, though retirement on Kithyra island, in the Ionian Sea, where he and his wife Eudokia make olive oil on their farm, is out of the question for now. "I can do a lot of things," he says. "I feel quite energetic."

I got the sense that Mr. Provopoulos considered his job largely done, that preventing a bank run last June had represented his ultimate test, one that he had passed. But sure enough, another crisis was about to erupt – Cyprus.

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The Cypriot banks are big players in Greece and the Bank of Greece was forced to move with alacrity once again to protect its banking system. To prevent contagion, the Eurogroup (the euro zone's 17 finance ministers), approved the sale of the Cypriot bank branches in Greece – they went to Piraeus Bank. "The Bank of Greece has contributed to the design of this agreement and to its successful execution," Mr. Provopoulos said on Wednesday.

The Governor may have only a year and change left on the job. But the grenades going off in the Mediterranean parts of the euro zone served as a rude reminder that the it might be too early to declare the Greek "crisis" over.

CURRICULUM VITAE

BACKGROUND

Age: 62; an economist by training.

Earned his master's and PhD degrees at Essex University in Britain.

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Has three children and six grandchildren, all in Greece.

Former CEO of Piraeus and Emporiki banks.

PERSONAL

He and his wife Eudokia make olive oil from a 300-tree farm on the Ionian island of Kithyra.

Likes to walk.

Works 12-hour days and wants to do "something energetic" in his next career.

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QUOTE

"We have much better olive oil than the Italians."

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