Stability Pact needs to be reformed, says BoG chief

Stability Pact needs to be reformed, says BoG chief

It is time for a reform of the Stability and Growth Pact, Bank of Greece Governor Yannis Stournaras told the 22nd Rencontres Economiques held in Aix-en-Provence in France. 

The Greek central banker recommended that the Recovery and Resilience Facility should be transformed into a permanent mechanism linking fiscal policy at the heart of the eurozone with new rules in order to avoid the moral hazard of relaxing fiscal stability on a national level. 

“Our goals here must be to ensure sustainability of public debt for all member states, achieving anti-cyclical fiscal policy and creating a central fiscal tool for all eurozone countries that will be activated to deal with symmetric turmoil (pandemic, war impact, etc),” Stournaras said.

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