Central banker calls for new policy mix
Bank of Greece Governor Yannis Stournaras on Tuesday called for a new policy mix that would boost growth and increase the credibility of the Greek economy among investors.
In a lecture at the Open University of Cyprus, the Greek central banker stressed that in order to attain sustainable growth, the key condition is that reforms and privatizations continue, along with a shift in the fiscal policy mix toward reducing tax rates and strengthening public investments and a reduction in the high level of nonperforming loans.
On the NPL issue in particular, Stournaras argued that both plans by the Finance Ministry and the Bank of Greece need to be approved and implemented in parallel.
He also commented on the five-year bond issue, saying it was “a small step in the right direction,” while adding that the most significant challenge for the near future will be Greece’s return to the markets on sustainable terms, and stressing that Greek bonds have yet to be restored to investment grade.
