The governor of the Bank of Greece expressed optimism that the war in Iran will end soon and there will be no risk of a recession.
The environment of heightened geopolitical uncertainty and energy pressures was referred to by Bank of Greece governor Giannis Stournaras, during a discussion at the 11th Delphi Economic Forum being held in Delphi.
Yannis Stournaras stressed that international markets appear “resilient and optimistic”, estimating that the key scenario remains a relatively short de-escalation of the conflict in the Middle East. “I belong to the optimists that the war will end soon, he noted, noting that “it was not a war of necessity, but of decision.”
However, he warned that uncertainty remains high and made clear that monetary policy will adjust accordingly. “If necessary, we will do what is necessary, he said, stressing that central banks now have more experience than in previous crises.
Referring to developments in the energy market and in particular the possibility of an escalation of tensions in the Hormuz Strait, he noted that an agreement could lead to a rapid improvement of the situation, while recalling that Europe has already gained considerable experience.
He placed particular emphasis on the independence of theEuropean Central Bank, which he called “the greatest achievement” of the European economic architecture. “No one in Europe could or would dare to reduce the independence of the ECB, he said, adding that the role of central banks is not to maximise profits but to ensure stability for the benefit of society as a whole.
As he explained, the key challenge for monetary policy remains the return of inflation to the target without the risk of a recession, noting that decisions require delicate balances, especially in an environment of exogenous shocks.
At the European level, Yannis Stournaras stressed the need to further deepen integration. “We need more Europe, not less, he said, stressing the need for a union of capital markets and closer cooperation between member states. He noted that there is now convergence, with the European south growing faster than the north.
For Greece, he said the economy has come a considerable distance since the crisis period. “Let’s not forget where Greece was 15 years ago, he said, noting the improvement in investment and the overall picture of the economy.
Asked about the OPEKEPE case, he said that “we have to wait,” stressing that the institutions are working and that the case was revealed by the Greek government itself.
Finally, he stood on the importance of the digital transition, noting that the digital euro is a crucial step so that “Europe is not left behind in the field of digital money.”
The debate was moderated by Christian Schubert, Economic and Business Correspondent of the Frankfurter Allgemeine Zeitung (FAZ) in Italy.
