They analyzed the current economic environment in Europe, the banking sector and the challenges that exist ECB Vice-President Luis de Guidos, the Governor of the Central Bank of Cyprus, Konstantinos Herodotou and the chairman of the Board of Directors. of the National Bank of Greece, Gikas Hardouvelis in the relevant discussion on Inflation dynamics, monetary policy & financial stability, in the context of the 8th Delphi Economic Forum which takes place in Delphi April 26 – 29 and is under the auspices of A.E. of the President of the Republic, Mrs. Katerina Sakellaropoulou.

Mr. Luis de Guidos noted that “we have good news we will not have a recession. We have very little unemployment, a negative record. Inflation is falling and will continue in the coming months.”

He then pointed out that “Europe has managed to avoid an artificial recession but that no such prospect is foreseen for 2023, with all key indicators remaining favourable,” he said. He added that “there is also some bad news. There are also some tensions from abroad. Let’s pay close attention to what developments are coming. There was a tightening of financing conditions.”

The vice-president of the ECB also spoke about a similar evolution of labor costs throughout the Eurozone. “In terms of wages we have seen an acceleration in increases. We will have an increase of 5% in 2023,” he underlined.

Regarding any liquidity risk in Europe, among other things he emphasized that “we are in the phase of focusing on something. There is a price trend in real estate, which is decreasing. We have points that worry us. Banks are resilient, in a better position than they were 10-15 years ago. Rising interest rates are enough for European Banks. We can be reassured but not rest.”

From his side, the Governor of the Central Bank of Cyprus, Konstantinos Herodotou pointed out: “There are challenges such as increasing wages. To avoid continuous increases because this can affect inflation.” He noted that China’s new “opening” may solve some problems, but it may also affect inflation.

He spoke of an increase of 300 basis points in the last period, saying: “We were at minus 50 basis points and we had to cover a wide range to get here.”

On monetary policy, he noted: “Decisions made on interest rates, until they affect the economy, take 16-18 months. Structural inflation persists and we will have to work on it.”

Regarding the banking crisis, following the developments with the US banks and Credit Suisse, the vice-president of the ECB, Louis de Guindos said, among other things: “In Europe the situation does not look the same at all. The US is a very peculiar case.”

He underlined the need in the Eurozone to pay attention to the development of financial conditions, as the demand for credit is decreasing.

For his part, the Governor of the Central Bank of Cyprus, Konstantinos Herodotou, on the same issue pointed out that “Memories of previous financial crises created tensions in the banking market. There is volatility in the market. There are also tools that can be used in these cases. It is too early to see what the markets think.” “As far as the banking sector of Cyprus is concerned, we have one of the largest liquidity in the EU” he added.