Greece has completed many reforms, but others are needed, the president of the ECB emphasizes. 2015 was a more dangerous time for Grexit. The banks’ progress is confirmed by Unicredit’s interest in Alpha.
Greece has made impressive progress, while twice coming close to Grexit, the ECB President emphasizes. Christine Lagarde, while underlining that the banking system has now been cleaned up and notes as a clear indication of the progress that has been made the investment interest of Unicredit for Alpha Bank.
Kr. Lagarde, speaking to “Sunday Daily” and the Alexis Papahela he underlines that he finds improvements in Greece in all areas (employment, growth, fiscal situation, debt-to-GDP ratio) and notes that the country has completed many reforms, but much still needs to be done. As he emphasizes, this progress that has been made did not go unnoticed by the rating agencies, which proceeded with upgrades: “I think it’s a huge testament to the country’s efforts,” states.
About public debt, reports that it is about 160% of GDP today and has declined significantly over the past two years, a trend that should continue in the future. As he underlines, Greece has responded to this challenge with determination and the results are already evident.
The President of the ECB, responding to a related question, states that Greece twice came close to exiting the eurozone, with the referendum debate in 2011 and, even more so, with the referendum held in July 2015. “The threat was much more tangible and much more alarming in July 2015,” he stresses, noting that if it weren’t for the determination of some European leaders, Grexit would have happened.
Referring to the causes of the Greek crisis and evaluating the intervention of the IMF, Mrs. Lagarde underlines that the initial mistake was that the country found itself in this situation, because there was no fiscal discipline. For the International Monetary Fund, he states that it would be useful to have longer-term programs than the ones it has, which they weren’t the best tools for a country that was in a monetary union without a fiscal union, or for the specific fiscal situation of Greece, as he typically says.
Regarding the lessons learned from the experience of the Greek crisis, he notes, among other things, that in Greece decisions were made, but then sometimes were reversed from the next political leadership, while even when decisions were made, there was no application and the follow-up required to move forward.
For greek banks, the president of the ECB emphasizes that a lot of work has been done for her sanitation and strengthening the sector, noting that non-performing loans were at 50% of loans in 2016, but today the figure is just over 8%. “The fact that a major foreign bank is interested in a Greek bank is a clear indication that the sector has become more attractive,” underlines, referring to Alpha Bank’s agreement with the Italian Unicredit.
The president of the ECB states that she is optimistic that in 2025 the central bank’s goal of inflation (2%). He notes, however, that there will be effects in the future on food prices from climate change. “Droughts, floods, warmer temperatures and rising sea levels will likely have an impact on food prices in the future,” emphasizes.