Stournaras says deal must be completed

The government must quickly reach a final agreement with its creditors and reforms must continue, Bank of Greece Governor Yannis Stournaras said on Thursday, also predicting that if the uncertainties are lifted the economy could remain on the path to growth this year.

In a speech at the 82nd annual general meeting of Bank of Greece shareholders, where the central bank’s annual report was delivered, Stournaras qualified the recent Eurogroup decision as “positive,” as it has averted “a rift with our partners which would have had inconceivable consequences for the Greek economy.”

He added that “in order to make the most of this window of opportunity, negotiations with our partners must continue in a spirit of cooperation and trust so that we can soon reach a final agreement that will be mutually beneficial.” The central banker went on to say that the Bank of Greece will contribute toward the effort to rebuild the Greek economy by way of sustainable development.

The basic condition for growth and social cohesion, according to Stournaras, is “to remain focused on the country’s European prospects and implement the recent agreement as soon as possible.”

The BoG governor said this year’s growth outlook is positive, but warned that the rebound “is fragile and does not allow for complacency.” Today’s uncertainty, based on doubts whether the agreement with the eurozone will be implemented, the deterioration of fiscal conditions and the relaxing of structural reforms, will have to be lifted, Stournaras warned.

The main changes already implemented “will have to be preserved and consolidated, because they constitute the cornerstone of the expected swing toward a new, outward-looking growth model,” he noted, adding that “the outstanding obligations are fewer and have a lower cost in comparison with the huge volume of changes implemented in recent years and the heavy price that the Greek society has already paid.”

On the credit sector, Stournaras said pressure on the country’s cash flow remains huge and the agreement with the eurozone must be implemented to help the situation revert to normal.