At a time when political life is in the throes of the pre-election period and inflation of benefits and promises of future interventions has begun – at a slow pace – the country’s central banker has in mind the next day and the way that the country and economy will not lose hard-earned money in memorial years and beyond .

Today, according to Mr. Sturnaras, the economy is in a good phase, as – through the crises of the pandemic and war – it has been able to recover with the help of tourism and reduce its debt, both through fiscal efforts and adjusted for inflation. However, there are problems tomorrow.

Thus, last Thursday, in his speech at the Greek-German Chamber, Yiannis Sturnaras sent a message to the political forces that consultations and coordination are needed when pursuing a balanced fiscal policy.

He did this because he knows that the country is not going to take a leisurely stroll, but an uphill journey in which it will have to steadily reduce the public debt as a percentage of GDP in order to win the trust of the markets, and not again find itself in a new inability to serve in a few years. to him.

In a conversation with “K”, he explains what the priorities should be in this context: “The first is a return to a surplus of 2% of GDP. The budget must leave a surplus to pay interest. This represents prudent financial management. The transition from a deficit of 1% of GDP to a surplus of 2% of GDP requires a significant fiscal adjustment and will come at a time when growth is not as strong as in the previous two years, and at the same time we are in a period of higher interest rates compared to previous years. When uncertainty in Europe eases, with the end of the war in Ukraine, the question to be asked of Greece will be whether it has ensured debt sustainability forever. Because after 2032 we will face significantly higher interest payments, now already capitalized. We now have the opportunity to significantly reduce the debt-to-GDP ratio so that, with the addition of capitalized interest, the debt remains sustainable and moves on a downward trajectory. This opportunity should not be missed.”

Now we have the opportunity to significantly reduce the debt-to-GDP ratio.

Given that elections provide fertile ground for all sorts of statements, the head of the Central Bank does not hesitate, as he usually does in such cases, warning: “We must be restrained before the elections. Credibility must be maintained in Greece because it was very strong and very easy to destroy in 24 hours. And when we talk about reliability, we mean financial, because that was our big problem in the past.” Mr. Sturnaras apparently relayed the message to the leader of the official opposition, Alexis Tsipras, whom he met on Thursday. “The political system should also be oriented towards the credibility of economic policy before the elections, because we also have to educate the people,” he explained.

He specifically referred to the position of the official opposition on the issue of auctions, stating that the income of red loan managers (servicers) is directed mainly to servicing high-rated bank bonds, so that the state guarantees of Hercules are not confiscated. If all guarantees are cancelled, the debt will amount to 18 billion euros.

Of course, it is known that in this matter neither the SYRIZA government nor the New Democracy government accepted the proposal of the Bank of Greece for an asset management company (bad bank), but that is another story.

As a second priority, Mr. Sturnaras mentions the need to increase potential GDP, a long-term growth rate that international organizations such as ΔNT estimate in the region of 1%-1.5 due to the aging of the population. %. According to the head of the central bank, this rate should be increased to 2%-2.5%, which can only be achieved by increasing overall productivity. And that, in turn, calls for drastic reforms, he says, emphasizing the need for faster justice and public education to adapt to market needs. “Delays in the administration of justice,” he says, “have negative consequences for the economy and investment. With regard to education, we are facing the phenomenon of 11% unemployment and at the same time a shortage of jobs in tourism, construction and agriculture. This is a disharmony that needs to be eliminated.”

Mr. Sturnaras is also worried about Europe, which must take the next steps towards integration. He points out that some member countries have not yet taken a position on the fundamentally sound proposals of the Commission on the Stability Pact, which, in his opinion, must necessarily be changed. “We cannot go back to the old Stability Pact,” he stresses, “that would be a failure.” He also argues that the banking union must be completed. “The lack of a pan-European deposit guarantee scheme contributes to the fragmentation of the financial sector in Europe,” he comments.