Problem with competition, who is responsible for the accuracy in the market, states the governor of the Bank of Greece, Giannis Stournaras.

As he states in an interview he gave to the newspaper Proto Thema and to Grigoris Nikolopoulos “high concentration also leads to high prices. This is also why we see relatively higher prices in Greece than in the Eurozone for many goods and services. This also results from the recent finding of Eurostat which shows that while the GDP per capita in Greece is at 67% of the average of the EU countries, its price level is at 88.2% of the corresponding average. That is, we are more expensive than other countries in relation to our income. This is why accuracy in Greece creates a serious problem for many households. Of course, this is not a recent problem, but it comes from the past.”

For this reason he argues that, under conditions, is it possible to reduce the VAT rate of 24%, which is one of the highest in the eurozone. However, as he argued, the priority is not the reduction of VAT, but the reduction of social security contributions at work.

On the issue of competition in the banking system and the low interest rates on deposits offered by Greek banks, the Governor of the Bank of Greece argued that banks are free to price deposits and loans in accordance with the laws of supply and demand, of course respecting the supervisory framework . But the Bank of Greece can, by contributing to the strengthening of competition, create more competitive pricing conditions through the empowerment of smaller banks, which, either alone or merged, will contribute to increasing competition in the banking system.

As he pointed out, he is also moving in this direction the creation of the fifth banking pole in the banking system, with the merger of Attica Bank and Pankritia with the simultaneous consolidation of their Balance Sheets making use of the state guarantees offered by the “Heracles 3” program.

Referring to the next moves, Mr. Stournaras reiterated that the reduction of interest rates four times this year, by 25 basis points each time, is possible.

Regarding the time at which the de-escalation of interest rates by the ECB will begin, the governor of the Bank of Greece reiterated, in an article published today in Nautemporiki, that the end of the first half of 2024 it would probably be the most appropriate time for the first rate cut, as long as the incoming data allows it.