#stournaras

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Greek households & businesses still keep billions under mattresses or abroad, says BoG governor

The governor of the Bank of Greece, Yannis Stournaras, has said that Greek households still keep their money away from the banking system because they are afraid of their savings. He claimed that 12 to 14 billion euros are under mattresses and that businesses have another 10 billion euros abroad. He urged the money owners to bring it back to the country’s banks.

“We are talking about an amount between 12 and 14 billion euros,” Stournaras has been quoted by tanea, as saying adding “businesses hold abroad 10 billion euros.”

“The threat of Grexit does not exist anymore, so there is no reason not to bring their capital to Greece,” he stressed.

There is information that close to €1 billion is the amount of capital held abroad by only one of the companies that hold their capital outside the Greek banking system.

Stournaras appeals to these companies “to show patriotism” and to bring their money their money to Greece. At the same time, he sends a loud message to households the prefer  mattresses and flower pots to keep their savings than in the banks.

The Central Bank governor underlines that the return of deposits deposits is a key factor in lifting of capital controls.

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ECB insists on benefits of a credit line, SSM and IMF agree

The proposal of a precautionary credit line for Greece after the end of the bailout program this summer returned to the table on Monday, as the mission chief of the European Central Bank in Athens, Francesco Drudi, reiterated that this is the best option according to Frankfurt.

In fact sources from European capitals say that the ECB is not the only institution in favor of a credit line; this view is also shared by the European Stability Mechanism and the International Monetary Fund. This shows that the government is set to come under pressure in the coming weeks and months to review its position, which would of course banish any talk of a “clean exit.”

Drudi arrives in Athens on Tuesday to take part in the negotiations over the fourth review. In an interview with newspaper Naftemporiki he stated clearly that a properly determined program of a precautionary character with strict and efficient terms is required in order for the ECB to maintain the waiver that allows Greek banks to obtain cheap liquidity from Frankfurt using junk-rated Greek bonds as collateral.

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The future of the Greek economy

This text by the governor of the Bank of Greece, Yannis Stournaras, is from a speech at a recent event organized by the Hellenic Spanish Chamber of Commerce in Athens.

The Greek crisis was the result of major macroeconomic imbalances accumulated over a long period of time, leading to the sovereign debt crisis in 2010. To a large extent, these imbalances have now been addressed, although major challenges remain.

Over the past eight years, Greece has implemented a bold economic reform and adjustment program that has fully eliminated fiscal and external deficits and improved competitiveness. In more detail:

- The general government balance turned into a surplus of 0.5 percent of gross domestic product in 2016 from a deficit of 15.1 percent of GDP in 2009. The primary surplus reached 3.8 percent of GDP in 2016 (program definition), from a deficit of 10 percent of GDP in 2009.

- The current account deficit has fallen by 15 percentage points of GDP since the beginning of the crisis, with the current account effectively being in balance over the last three years.

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Greek government tells central banker to keep out of country's politics

The Greek government told the country’s central bank chief to stay out of politics on Tuesday after he urged it to wrap up a long-delayed bailout review.

Bank of Greece Chief Yannis Stournaras on Monday warned the delay was creating uncertainty and risked forcing a downwards revision of growth forecasts this year.

Relations between the government and central bank have been strained in the past, though the leftist-led government’s swipe at Stournaras was the first for many months.

"Independent institutions can make their assessments but must refrain from politicizing," government spokesman Dimitris Tzanakopoulos said at a weekly news briefing.

After months of hard-fought negotiations, Greece now hopes for a deal with its international lenders during April and has said it is working to bridge differences on labor, pension and energy reforms.

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Lagarde: Greece’s primary surplus at 3.5% is excessive, should be reviewed

The future President of the European Central Bank, Christine Lagarde, suggested that the Greece’s commitment to a 3.5% of GDP primary surplus target is “excessive” and should be reviewed.

Lagarde made this statement during her hearing before the Committee on Economic and Monetary Affairs of the European Parliament in Brussels on Wednesday.

Asked about the IMF’s standard position on Greek surpluses and to what extent she will defend this from the position of ECB President, Lagarde said that the IMF’s view and hers, still speaking from her position in the IMF, is that the 3.5 pct primary surplus for Greece is excessive and puts too much pressure on the recovery of the Greek economy.

Primary surplus at 1.2%-2% would help Greece to grow, she added among others.

The IMF continues to hold the same view and, as Greece is in the recovery phase, it is something that should be carefully reviewed.

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Greece's Economic Challenge: "Hundreds of Thousands Have Left"

It is hard to imagine a more unsettling description of one’s country than saying that “the economy is on a low flight path…and it contains bombs with lighted fuses.” That assessment came from Greece’s new finance minister, Christos Staikouras, earlier this month when he was sworn into office, after the conservative New Democracy party trounced the left-wing Syriza government of Alexis Tsipras in elections on July 7.

Now, new Prime Minister Kyriakos Mitsotakis—a Harvard-educated venture capitalist—has the urgent task of ensuring that those bombs do not explode in midair, much as they did in the early 2010s, when Greece teetered on the edge of bankruptcy and came close to crashing out of the Eurozone. The country’s pain is legion: Its GDP has shrunk 26% in eight years—the biggest recession in history of any country in peacetime, save perhaps for the Great Depression.

Thanks to a bailout of about $300 billion from the IMF and the European Union, Greece’s 10 million citizens are still E.U. members. But there were other thanks to give for the rescue, in particular to China, whose state-owned shipping giant Cosco Shipping Group now owns Greece’s biggest port, Piraeus. For this month’s Fortune, we traveled to Piraeus to describe how that deal became critical to Greece’s economy, and to Chinese President Xi Jinping’s mammoth global ambitions.

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Stournaras points to fiscal risks, Tsakalotos responds with irony

Bank of Greece Governor Yannis Stournaras on Wednesday disputed the Finance Ministry’s projection that there will be an overrun in the year’s primary fiscal budget, and expressed his clear opposition to the handouts the government passed on the same day through Parliament and intends to continue introducing.

...Finance Minister Euclid Tsakalotos offered an ironic response to the central banker’s warnings, tweeting that, “today, by mistake, Mr Stournaras reads the budget from his time as finance minister, when he had some difficulty in meeting targets. I am certain that if he looks into our budget and our financial indexes he will realize that the necessary fiscal leeway exists.” Stournaras was finance minister from 2012 to 2014.