Optimistic about the course of its reduction public debtdespite the recent rise in borrowing costs, the Governor of the Bank of Greece appeared Giannis Stournaras. Noting that “no Eurozone country will reduce its debt to a greater extent than Greece.” As he states in an interview given to the German Frankfurter Allgemeine Zeitung, the recent increase in interest rates does not affect Greece so much.
As he points out (according to the text sent by the BoG) interest rates have risen due to the crisis in Ukraine and the possible tightening of European monetary policy. “But this is not very important for Greece.” He himself – according to the publication, believes that the public debt can be reduced in the near future by 3.5 percentage points – and this calculation does not even include the planned return to primary surpluses, as well as proceeds from privatizations. “No country in the Eurozone will reduce its debt to a greater degree than Greece,” said G. Stournaras. Fitch analysts expect debt to fall to 155% of GDP by 2031.
According to the report, Greeks have the opportunity to remain quite relaxed due to the favorable terms of the three rescue programs from 2010 to 2015: “This is the other side of our test: yes, we had a tough austerity policy and negative growth for for several years, we cut wages and pensions, we raised taxes. But the public debt was refinanced on very favorable terms. “The average interest rate is just 1.4% – significantly lower than in many other countries,” said the Governor of the Bank of Greece. On average, bilateral and multilateral loans have a repayment period of 20.5 years from today, some of which expire in 2070.
Regarding the political developments and the wave of accuracy, the German newspaper points out that “Greeks are already facing difficulties with the vertical rise in energy costs. THE opposition SYRIZA, led by Alexis Tsipras, recalls the problem, blaming constantly on government. Prime Minister Kyriakos Mitsotakis from the New Democracy Liberal-Conservative Party is accused of doing nothing to combat social inequalities.
Parliamentary elections will be held in a year and a half at the latest. Mitsotakis’s party is currently leading in the polls, but the possibility can not be ruled out that the Social Democratic PASOK, which is recovering significantly, will form a left-wing coalition government with SYRIZA, which is in second place in the polls. The course of liberal economic reform would end in this case, business circles fear. But the world of economics still has confidence in Mitsotakis’ policy. “This year, the Greek prime minister wants to reduce the deficit to more than half, reducing it to 4%.”
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