The war is weighing on economies, especially in Europe, increasing uncertainty and energy costs, but the Greek economy entered this crisis with several “cushions” such as primary surpluses, reserves and a strong banking system, Bank of Greece Governor Yannis Stournaras said. “A recession in Europe cannot be ruled out if the scenarios for oil prices above $150 a barrel are confirmed, he noted, speaking to Parapolitika radio station, and argued that “in Greece it will be more difficult to go into recession because we already have a positive output gap.”.
On the possibility of early elections, he said “it would be a huge mistake. At the moment Greece is considered a very successful example of coming out of a very big crisis and it is going very well, why should we have elections now in the midst of war and great turmoil?” he noted.
In detail, the interview with C. Stournaras:
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G.STOURNARAS: The war is having a negative impact on economies, especially in Europe as we are an oil importer. In the Bank of Greece and the European Central Bank we have made some scenarios because there is a lot of uncertainty because we don’t know how long the war will last and what the intensity of the war will be.
We have made some scenarios because there is a lot of uncertainty because we don’t know how long it will last and what the intensity of the war will be.
G.STURNARAS: All countries have taken measures, and we have taken measures, they are mild at the moment because we don’t have a very big escalation of the crisis so we have to hope for the best and prepare for the worst. The good thing is that the Greek economy went into this crisis with enough cushion. We have primary surpluses, there are large government reserves at the Bank of Greece, the banks are adequately capitalized better than ever before, the insurance companies as well so we should hope for the best, if this war continues, more measures will have to be taken.
G.STURNARAS: Right now nobody is saying that we will enter a recession but if it continues, if we go to scenarios above $150 a barrel nothing is out of the question, even a recession. I’m talking about Europe, in Greece it will be even more difficult to go into recession because we already have a positive output gap.
G.STOURNARAS: I don’t think the war will last, when the war stops, yes, we will have side effects, inflation will not fall overnight but it will not last long. We will return to normality after a certain period of time, and because I like to see the glass half full, no good deed goes unpunished, it is a new alarm bell for Europe that says “you have to move towards more integration of the markets, remove the internal barriers and finally go ahead with the steps we have said. That is, we want to move forward together on defence, on the green transition, on new technologies for these three things let’s issue common European debt.
Asked about the possibility of early elections:
G.STURNARAS: To hold elections today would be a huge mistake. At the moment Greece is considered a very successful example of coming out of a very big crisis and is doing very well, so why have elections now in the midst of war and great turmoil? Political stability is the greatest intangible asset a country has, it allows it to make decisions under very difficult circumstances.
