ESM calls for prudence and reforms

Greece needs to follow prudent fiscal policy and continue reforms in order to ensure the confidence of the markets, Pierre Gramegna, the new executive director of the European Stability Mechanism (ESM), pointed out on Thursday following his meeting in Athens with Finance Minister Christos Staikouras.

After crediting the country’s “remarkable progress” even during the pandemic and energy crisis, Gramegna, who began his tour of European capitals in Athens, added: “However, we must remain vigilant. Maintaining the big gains of the past, keeping fiscal policy on a sustainable path and continuing on the path of reforms will help Greece’s economy to thrive. Also, all of this is important to maintain investor confidence in the market.”

Gramegna also met with Prime Minister Kyriakos Mitsotakis and the governor of the Bank of Greece, Yannis Stournaras, as part of the wider consultation he is carrying out on the future role of the ESM. As he said, he discussed with Staikouras how the ESM can better support its members and continue to play a key role in the Economic and Monetary Union in the future.

The new role of the ESM is being considered in the framework of the revision of the Stability and Growth Pact. The mechanism is called upon to adapt to the new data, to be the “safety net” for the member-states in difficult times, but also to overcome the reservations that any recourse to it is associated with, due to the strict conditions it entails.

In this regard, Staikouras emphasized the need to strengthen the role of the ESM to strengthen financial stability in the eurozone. Moreover, giving a sign of Greek positions in view of the negotiation of a new Stability Pact, he said that there must be flexibility to manage the economic cycle and encourage public investments that increase sustainable growth.

The finance minister assured Gramegna that the priorities of the Greek government’s economic policy include “ensuring the existing fiscal stability, dealing with the economic effects of the multi-level crises, making use of the fiscal space available each time and the implementation of the structural changes.”