In a turbulent international environment, Greece for the first time stands out positively, Bank of Greece Governor Yannis Stournaras said on Monday in a radio interview.<\/p>\n
Speaking on Skai radio, the central banker noted that the Greek economy is growing at twice the rate of the rest of Europe, while its most important achievement in recent years has been reducing public debt as a percentage of GDP by about 10 points annually.<\/p>\n
\u201cWe cannot say that wealth is distributed exclusively to the rich. Very few believed we would manage to overcome the crisis, and we should preserve this achievement,\u201d he said. \u201cFiscally, we have left behind the bad past, but we must now emphasize reforms. Overall, we are doing well, but not perfectly \u2013 we can do better.\u201d<\/p>\n
\u201cThe strong revenue performance creates fiscal leeway, and the European Commission has signaled that some of it can benefit citizens. We are reducing debt by 10 points a year, this is the most important success,\u201d he added, stressing that Greece will not return to the brink of bankruptcy if it continues on this path. \u201cOf course, if the prime minister were to hand out checks again, we could find ourselves back in 2010. Redistribution through income tax proves more effective than any VAT reduction,\u201d he emphasized.<\/p>\n
Responding to a listener, Stournaras said that what matters for the Bank of Greece is compliance with European Commission rules, which are now more flexible and set a ceiling on each member state\u2019s spending.<\/p>\n
\u201cWhen investments lag, productivity and real incomes also lag \u2013 it is a chain reaction. Due to the crisis, we fell very low in terms of purchasing power. Now we are slowly converging with the European average, at a rate of 1.5%. If we raised salaries by 30% tomorrow, we would go bankrupt. You cannot increase wages in a country unless you first increase productivity. Productivity means reforms and investments that make the economy more flexible. Since 2019, Greece has seen a 60% increase in investment, with four-fifths of it in productive sectors.\u201d<\/p>\n
Regarding the minimum wage, he said that in all countries it involves some degree of state intervention. \u201cIf this were not the case, it might be lower than it is today. But this does not mean the state determines all salaries \u2013 the minimum and the average wage are different things,\u201d he said.<\/p>\n
\u201cUnfortunately, there is no silver bullet. To grant wage increases, there must be a reflection of productivity,\u201d he added.<\/p>\n
At the same time, he referred to negative aspects of the country\u2019s economic reality, such as the fact that some citizens still do not earn a monthly salary. \u201cThat is why the government should focus on the most vulnerable. Greece\u2019s inflation is higher than the rest of the eurozone,\u201d he said.<\/p>\n
\u201cInflation is forecast at 3.1% for 2025, gradually easing to 2.6% in 2026 and 2.4% in 2027. Prices rose globally after the pandemic disrupted supply chains, and then Russia invaded Ukraine, but since then inflation has been gradually falling. This can only be addressed by increasing wages in line with productivity, as well as discipline in public finances.\u201d<\/p>\n
Finally, he urged bankers to adjust their interest rates, warning that competition from digital banks such as Revolut is looming.<\/p>\n","protected":false},"excerpt":{"rendered":"In a turbulent international environment, Greece for the first time stands out positively, Bank of Greece Governor Yannis…\n","protected":false},"author":2,"featured_media":79033,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[8139,79,179,18,1729,19,185,17],"class_list":{"0":"post-79032","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-banking","9":"tag-business","10":"tag-economy","11":"tag-eire","12":"tag-finance","13":"tag-ie","14":"tag-inflation","15":"tag-ireland"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/79032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=79032"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/79032\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/79033"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=79032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=79032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=79032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}