“The Grexit is a closed chapter”

31 January 2016
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The governor of the Bank of Greece Yannis Stournaras was adamant that the possibility of ‘Grexit’ is “a closed chapter”, in an interview he gave to the Financial Times.

In the interview Mr. Stournaras argued that he predicts that the local economy will return to growth in the second half of 2016, since there was a “negative carryover from the last quarter of 2015”. This is an improvement since earlier estimations in July suggested that the year would close with a 2.5% rate of recession.

According to Mr. Stournaras the bailout program review will greatly determine the future progress in the Greek economy. The hardest part of the program, he added, is the controversial reform of the country’s social security system. The Greek central banker explained that he has urged the coalition government in Athens to focus on the implementation of the bailout agreement. Any delays in the process however may entail unbearable risks for Greece, he commented.

Furthermore, Mr. Stournaras noted that he would like to see less austerity and more investments and greater efforts made to better take advantage of state property. He also stressed that the promise of debt relied, which has yet to be implemented, will be both meaningful and symbolic.

Finally, when asked about the refugee crisis, the central banker told the Financial Timesthe countries that benefit the most are the ones which host refugees, while the cost tends to be higher for countries from where they travel. With a maritime border of thousands of kilometers is will be very difficult for Greece to curb the refugee wages. He added that the immediate fiscal for Greece will be between 0.3% and 0.4% of GDP.

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