BoG: Clear risk to the economy from the endless negotiations

27 March 2017
170 Views

Central banker Yannis Stournaras warned on Monday of the risk of a full reversal of the economy’s course as the delays in the completion of the bailout review may “put in doubt all the targets for this year, the fiscal targets, the growth targets and the credit sector targets without exception.”

Addressing an event of the Parliamentary Budget Office, the governor of the Bank of Greece stressed that “the immediate completion of the second review is necessary as it has been delayed by more than a year. This delay generates an uncertainty that for months has been starting to have an adverse impact on all economic indices.”

Stournaras added that the problems Greece is currently facing are due to the poor implementation of reforms and growth models: “Growth, which in the past has been introvert [consumption-driven], relied on excessive borrowing and not on reforms,” he commented.

He also said that after the review, emphasis must be placed on promoting privatizations, tackling nonperforming loans and high state debts with a revision of fiscal targets, changing the fiscal policy mix and containing long-term unemployment.

The head of the Parliamentary Budget Office, Professor Panayiotis Liargovas, referred to the five reasons Greece remains in a bailout program, unlike other eurozone state. He attributed this to the original economic conditions, which were much worse that in other countries, the fiscal policy mix pursued, the non-implementation of structural measures, the underestimated effects of political uncertainty on the economy, and the unfair distribution of the fiscal adjustment’s load.

In the meantime, US bank Citi noted that the lack of confidence and pressure on liquidity have been aggravated by the delays in the bailout review, diminishing the chances of a successful conclusion to the third bailout program in the summer of 2018 and creating the need for a fourth.

You may be interested

Greek gov’t goes to pot
FINANCE
shares28 views
FINANCE
shares28 views

Greek gov’t goes to pot

Panos - Jan 17, 2018

Greece's parliament is expected to approve the medical use of cannabis in the coming weeks, a deputy minister said Sunday,…

Lefteris Petrounias declared Male Gymnast of the Year
GREECE
shares68 views
GREECE
shares68 views

Lefteris Petrounias declared Male Gymnast of the Year

Panos - Jan 17, 2018

Lefteris Petrounias and the Greek gymnastics team were among the top winners at the European Federation Awards on Monday, receiving…

BoG Gov. Stournaras: Central bank has an obligation to publicly warn about risks
FINANCE
shares43 views
FINANCE
shares43 views

BoG Gov. Stournaras: Central bank has an obligation to publicly warn about risks

Panos - Jan 17, 2018

Influential Bank of Greece (BoG) Gov. Yannis Stournaras on Tuesday reiterated that the country's central bank has an obligation to…

Leave a Comment

Your email address will not be published.