The need for Greece to pursue and continue prudent fiscal policy reformsto ensure the confidence of the markets, noted yesterday Pierre Grameniaits new chief executive European Stability Mechanism (ESM)after a meeting in Athens with the Minister of Finance Christos Staikouras.

Paying tribute to the country’s “noticeable progress” even during the pandemic and energy crisis, Mr. Gramenia, who began his tour of European capitals from Athens, added: “However, we must remain vigilant. Preserving the great achievements of the past, maintaining fiscal sustainability, and continuing the path of reform will help the Greek economy thrive. In addition, all this is important for maintaining investor confidence in the market.”

Mr. Gramenia also met with Prime Minister Kyriakos Mitsotakis and Bank of Greece Governor Yiannis Stournaras as part of a broader consultation he is undertaking on the future role of ESM. He said he discussed with Mr. Staykura how the ESM can better support its members and continue to play a key role in the Economic and Monetary Union going forward.

It is noted that the new role of the ESM is being considered in the context of the revision of the Stability and Growth Pact. The mechanism is designed to adapt to new data, to be a safety net for Member States in difficult times, and to overcome the reservations that it currently faces due to the stringent conditions it entails.

In this regard, Mr. Staikouras emphasized the need to strengthen the role of the ESM in order to strengthen financial stability in the Eurozone. In addition, outlining Greece’s position on the negotiations on a new Stability Pact, he said there must be flexibility to manage the business cycle and encourage public investment that promotes sustainable growth. The Minister of Finance assured Mr. Gramenias that the government’s economic policy priorities include “ensuring the existing fiscal stability, combating the economic consequences of multilevel crises, using available fiscal space each time, implementing structural changes.”