Bank of Greece Governor blasts ex-Finance Minister Varoufakis before parliamentary committee

12 October 2016
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The Governor of the Bank of Greece (BoG), Yiannis Stornaras testified before the parliamentary enquiry committee examining the loans to Greek media, Tuesday, causing former Finance Minister Yianis Varoufakis for the harm caused on the Greek economy due to the capital controls imposed in the summer of 2015. In the long, and often heated questing by the committee members, Stournaras revealed that Varoufakis was going around saying he was a Minister of a bankrupt country. Stournaras directly linked Greece losing the waiver on state bonds and the start of Greek banks being cut off from liquidity to the stance taken by the former Minister during his tenure in office. He added that he had urged other SYRIZA Ministers, like Dragasakis to ‘reel in’ Varoufakis, but said the damage had already been done to the economy with the ECB suspending its support to the Greek banking system. The head of the BoG defended the state of Greek banks, despite the pressing questions by MP committee members from the coalition government of SYRIZA-ANEL, claiming they were in much better shape than other EU banks regarding their capitalisation levels, adding that this had been achieved with the minimum burdening of the Greek taxpayer. Stournaras insisted the Greek banking system was fortified due to a third capitalisation, even though the 2014 stress tests showed the banks were in no need for further financial assistance. The governor claimed the first period of SYRIZA-ANEL in power as one of great uncertainty, claiming it had brought about a deterioration in the macroeconomic climate in the country, which lead to missing the GDP 2.5% target and to the inevitable capitalisation of the banks. The central banker objected to the members’ arguments that the Greek banks had been sold off to private investors, stressing that the Greek had maintained a role through the Hellenic Financial Stability Fund. On whether he believed Greece could exit the current economic crisis, Stournaras expressed his reserved optimism. “We still have some distance to cover before we can go to the markets”, he said.

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