FinMin, top banker optimistic on economy’s prospects
The new Finance Minister, Kostis Hatzidakis, and the Governor of the Bank of Greece, Yannis Stournaras, had a first meeting Tuesday to discuss policy, focusing on fiscal policy, banks and private debt.
The two officials met for about 90 minutes and then told reporters they had a “shared understanding” about the state of the economy, as well as a shred optimism about its prospects.
“Both of us are optimistic about the Greek economy’s course. We are at a point where there is a confluence of political and economic factors that feed this optimism,” Hatzidakis said.
Stournaras, on his part, said that “there is a shared understanding,” adding that “the omens are excellent.”
On fiscal policy, the Finance Minister said that “the Greek economy has made progress on investments, export, the GDP and on the jobless rate. And it is up to use move even further by following the right economic policy, especially fiscal policy, far from populist temptation, to send the message here and abroad that our country will follow the European way, the common sense way, just as it did over the past four years, redoubling the effort and surprising people positively with our determination. The goal is for Greece to become an advanced European country at all levels, especially on the economy.”
Hatzidakis recalled serving at the same government with Stournaras, a conservative-socialist coalition led by New Democracy leader Antonis Samaras, from 2012-2014, Stournaras as Finance Minister (before he was appointed Bank of Greece Governor in June 2014) and Hatzidakis as Development Minister. Hatzidakis added that he and Stournaras “agreed to meet regularly. It is an institutional obligation, but it is all the more reason to maintain this personal relationship we already had.”
“Greece is vastly different from what it was back then (in 2012-14) and the economic horizon is now clear,” said Stournaras, adding that “beyond the subjects Bank of Greece is competent for, issues of monetary policy, and financial stability, its charter says the Bank is the state’s consultant on whatever issues it can help on, provided the Finance Ministry asks for its help. We have what is probably the largest research department in the country. The Bank will be at the Finance Minister’s disposal for whatever help he might need.”
In other business, Hatzidakis will meet the heads of the “big four” Greek banks (Alpha, Eurobank, National, Piraeus) after the end of the policy statement debate in Parliament.
Stournaras will host a monetary policy meeting of the ECB Governing Council in Athens in late October.
Selling the state’s shares in private banks is a priority for the government; other priorities includes expanding the state guarantee mechanism to help smaller banks get non-performing loans off their balance sheets, and the big banks to complete the same process. As for the gap between deposit and loan rates, the Bank of Greece’s longstanding position is that such issues are dealt with with more competition and not with interventionist administrative measures. Greece’s central bank also feels the same about “greedflation,” the price gouging by companies aimed at padding up their profits.
