If the Bank of Greece did not operate protected by the institutional framework of independence, following what happened in 2015, perhaps the country would have left the eurozone, argued the governor of the Bank of Greece, Yannis Stournaras, speaking today at the Kathimerini conference in a panel titled: “In the next 50 years, is Democracy safe?” Is Greece reformable?”
“Who doubts that if it wasn’t for the Bank of Greece, we might not be in the euro following the adventure of 2015?” said Mr. Stournaras.
For this, as he argued, there must be institutions that act as a “counterweight” to the central authority. “The quality of democracy will improve with greater trust in the institutions”, said Mr. Stournaras.
He argued that despite the long-term crisis that Greece went through, it remains relatively high in the UN human development index (it is a summary measure of the average achievements in basic dimensions of human development: long and healthy life, knowledge and a decent standard of living). and specifically in the upper 13%. As he added, we should aim for the country to rank even higher, in the 5% of countries, in the coming years.
He also noted that democracy in the country is not in danger, however, widespread inequalities strengthen populism, which is a threat to democracy. To meet this challenge, as the Governor of the Bank of Greece said, a “safety net” with interventions in taxation and supervision is required. However, as he underlined, the first priority must be Education.
Regarding the problem of immigration, Mr. Stournaras said that today there is a shortage of 200,000 workers and “if we do not manage to meet these needs in tourism and construction, then we will have a problem in the economy” he said characteristically adding that “if we did not have the Albanians immigrants in the 1990s, we would not have achieved the inflation criterion set by the Maastricht Treaty.
Asked regarding the problem of public debt, Mr. Stournaras, making a historical review, said that following the apparent bankruptcy of 2010, the country received a huge gift: The largest financial aid of 289 million euros in debt refinancing at a low interest rate. He estimated that with a sustained 2% primary surplus in the Budget and the continuation of reforms over the next 50 years, public debt can return to 60% of GDP. “We owe it to the next generations,” he said.
The former TCE commander concluded by saying that “I hope we don’t kill ourselves in the future. We have the ability to take advantage of the huge debt settlement that took place.”
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