As the governor of the Bank of Greece underlined, now is the right time to act, “as suppliers and not as buyers”.
The time is ripe to review it Stability and Growth Pact argued the Governor of the Bank of Greece Giannis Stournaras speaking at the 22nd Rencontres Économiques, Aix-en-Provence, France.
He suggested that the Resilience and Growth Fund should be turned into a permanent mechanism linking fiscal policymaking in the eurozone center to appropriate rules, in order to avoid the moral hazard of loosening fiscal stability at the national level.
“Our goals here should be to ensure public debt sustainability for all member states, to achieve countercyclicality in fiscal policy and to create a central fiscal tool for all euro area member states that will be activated to it faces symmetrical shocks (e.g. pandemic, effects of wars, etc.)” he said characteristically.
He found that despite the progress that has been made since the financial crisis, there are still reforms that cannot go ahead. As for example the creation of a pan-European deposit insurance fund, as well as the completion of the banking crisis management framework.
Alongside. pointed out that the incomplete banking and fiscal union in times of crisis and uncertainty, such as the current one, due to Russia’s invasion of Ukraine and the ongoing war, creates obstacles (financial fragmentation) in the smooth transmission of monetary policy to all its member states euro zone.
Therefore, as underlined by the commander of the Security Council, now is the right time to act, “as suppliers and not as inspectors”.
Referring to the completion of the banking union, he argued that it is of crucial importance for the creation of a complete economic and monetary union. In particular, on the subject of bank supervision, he proposed that that of less systemic banking institutions (such as the Bank of Attica), converge (taking into account the different levels of risk) with that of systemic banking institutions (SIs).
RES-EMP
View the news feed and get the latest news.
