Speaking about the Greek economy, he said that we should return to primary surpluses, in order to pay the interest on the national debt
Winds of stagflation are blowing in the global economy, Europe underestimated the dangers of war, said the governor of the Bank of Greece, Yannis Stournaras, speaking to SKAI 100.3.
He added that the risk factors stem from the fact that Russia is an energy giant and we depend on it.
Speaking about Greece, he said that it is very lucky, because the income from tourism is doing much better than expected.
The BoE will need to revise its growth forecasts further, he said.
Asked about government subsidies, he said that “the government gives money, it does its best, it can’t do more.”
He added that the winter will be difficult for all of Europe, hence the decision taken yesterday at the Council of Energy Ministers to reduce the consumption of natural gas.
Speaking about the Greek economy, he said that we should return to primary surpluses, in order to pay the interest on the national debt. “In the medium term we should return to fiscal balance” he said and added: “You see what is happening in Italy. As soon as Draghi resigned, the spreads increased.”
He added that he sees no such risk for Greece and added that the lesson from Italy is that strong governments are needed to take action when needed.
“Technocratic governments do not thrive in difficult times, as was seen in Italy,” he said.
“Greece must always have a strong government, which can take measures, as happened now with the war in Ukraine,” he stressed.
He noted that the inflation is exogenous due to increased energy and food prices resulting from the war.
If the war stops, he added, the economy will begin to improve dramatically, both globally and in Greece.
He described the investment level as an achievable goal, stressing that in order to achieve it we must be fiscally stable.
If we succeed, hybrid funds will flow into Greece, as he said.
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