Stournaras: Let’s not return to the policies of the past

Economic growth will be the key that will help strengthen social cohesion, Bank of Greece Governor Yannis Stournaras told the Delphi Economic Forum Sunday.

Stournaras reiterated that Greece must persist with reforms, market opening, new technologies, education and its linking with the job market and, above all, must never return to the failed policies of the past.

On non-performing loans (NPLs), Stournaras said that in 70 percent of the cases, the crisis is to blame, since the people who losttheir jobs because of it can no longer service them.

But most of the rest have been abetted by irresponsible policies that have failed to protect the banks from strategic shirkers.

Banks are making a great effort to reduce NPLs and they have declined by 25 billion euros during the past four years, Stournaras said, adding that they still account for an unacceptably high 45 percent of the total.

He added, however, that Greece enjoys the most generous protection system of main homes from creditors and noted that, despite the crisis, home repossessions were kept low and that the family networks and culture had something to do with it.

As for banks, they did what they could amidst the crisis. Deposits have been left alone, “the banks are well rrecapitalized and restructured,” Stournaras said.

Asked about Greece at present, he responded that “Greece is no longer the elephant in the room for Europe” and that, thanks to the efforts of many governments since 2010, when Greece came under close creditor supervision, we managed to turn around a very difficult situation.

Stournaras also criticized the interventionist instincts of some governments. “Central bankers have the mandate to be independent because they uphold fiscal stability. This is something that some governments do not like. And this is because their horizon is time-limited compared to that of central bankers and this may be the cause of the friction that sometimes exists.”

His own duty, he said, is to  protect the independence of the central bank as the law obliges him to do.

When asked if there is a campaign against him, Stournaras responded he will leave to the people and the justice system to judge. “Nothing will prevent me from fulfilling my duties,” he said.

Concerning the now notorious, taped call from Alternate Health Minister Pavlos Polakis, Stournaras said that “it is not normal to call the central banker and record the the call. This is flies against common sense, breaks the law and all EU legislation about European Central Bank independence.”

“It is difficult being a central banker in Greece nowadays.”

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