Greece now on ‘right path,’ says Stournaras
Bank of Greece governor Yannis Stournaras has confessed that he can now “sleep at night, without worrying about fiscal instability” because Greece is on the “right path” in terms of the economy.
“If the government manages to maintain the primary surplus at 2% while making the necessary reforms, we have nothing to fear,” he told the Delphi Economic Forum.
However, he pointed out that the country is still lacking in terms of structural competitiveness.
“Theoretically we have an unemployment rate of 10.5%. But the reality is that there are skills that are missing from the labor market. The big picture is that we have solved the main problems like debt refinancing, banks and social security, but there are other serious problems [that we need to solve] in order to increase our competitiveness and growth rates.”
He said the EU needed a fund, similar to the Recovery Fund set up during the Covid pandemic, to tackle climate change, the “elephant in the room” that all countries are facing.
The bemoaned that the EU now suffers from a lack of leadership, expressing his relief that that the financial crisis “happened then and not now.”
“Greece was lucky in a sense during the crisis because there was leadership in Germany, France and the US, who decided that Greece should stay in the euro and should not make the mistake of leaving … I don’t think there is such leadership today,” he said.
Greece’s experience in the 1990s proves that “immigration can help” economies. he suggested.
“In the 1990s, everyone believed that it would be impossible for Greece to achieve the Maastricht criteria. The problem after all was inflation. The immigrants who came to the country then kept wages at reasonable levels and thus allowed Greece to achieve its inflation target.”
