“200,000 hands are missing”
“We are not doing badly, in a rather turbulent environmentinternational, with great uncertainty, with two wars, left and right of our borders. Greece is growing at 2.3%, Europe at 0.7% – 0.8%, so we are converging for another year. In recent years there has been convergence of the product per capita, and mainly there is convergence while maintaining fiscal discipline as it should be maintained, that is we will have a primary surplus of around 2.5% of GDP if Greece meets the conditions of the Stability Pact. On an annual basis investments are increasing by 2%, quarter by quarter they have fallen very low, we are investigating why. Investments in the 9th month increase approximately as much as consumption. We also went up a notch from the credit organization Scope Rating” noted Mr Giannis Stournaras.
The per capita remuneration to employees, he explained, increases by 5.1%, covers inflation (3%). “The private sector pays higher than the public sector. Just a few years ago Greece was practically bankrupt. Of course we can increase the productivity of all the factors of production, not just the worker.”
As the head of the Central Bank pointed out, migration from desired destinations is a solution to the problem of the labor market, internal solutions also exist… we must increase the participation of women in the production process, we need to see young people because they don’t work and prefer to stay with parents.
Europe needs immigrantspointed out the commander of the Ministry of Defense, because the labor force is decreasing due to aging, something that we also have here in Greece. We cannot deny this, because if we do, then we will be condemned to productive stagnation 200,000 hands missing. There are training programs for workers without the necessary skills, the Recovery Fund provides the funding. President Trump has said he will deport a number of immigrants. This will create inflation in America… Because it will shrink the labor market, the supply of labor, given demand, wages will rise, inflation will increase.
“In the ECB, a certainty has started to be created about what kind of global economy we will have, what feedbacks we will have from the US… If it increases tariffs in Europe by 10% horizontally, then we will have a 1% reduction in GDP. We expect next year 1%, if President Trump implements these policies, the threats, then we will go to 0, we will be at the limit.”
Europe, Yiannis Stournaras pointed out, must agree on exactly what it wants in the Summit Council and, in my opinion, appoint a negotiator as with Brexit. “What President Trump said ‘either buy American gas and oil or I’m going to put tariffs on you’ harkens back to other times, hundreds of years ago.” Europe must arrange its course and agree and appoint a negotiator. I believe in free trade (…) it brings prosperity. In China the consumer is used to living with little, the one who will be affected mainly is the consumer in America and Europe. We will be in a difficult situation if what President Trump said before the election comes true. I hope sobriety prevails when he sits down to discuss this with his advisers.”
With regard to the current account deficit, he spoke of a dark spot in the Greek economy, stating that we need to improve the ability to produce internationally tradable goods and services. We also import food… I find it absurd to import fruit and vegetables from the Netherlands.
“In recent years, the financing conditions for small and medium enterprises with the Development Fund, with the Development Bank and the European Investment Bank have greatly improved. Banks give new loans to small and medium enterprises. Together with the government, we want to make the banking system more competitive with the “fifth pole” on the one hand with the merger of Attica Bank – Pankritia, or an ecosystem of smaller banks, the non-competitive ones were closed.” The business plan of the merged Attica Bank – Pankritia is oriented towards small and medium entrepreneurship.
Referring to a recent study by the Council of Ministers contained in its report, Yannis Stournaras categorically stated “no”, clarifying that reducing VAT on food would not help accuracy in our countrybecause the Greek economy is small and easily short-sold. If you reduce the VAT it will not fall, because the profit margin will increase, he observed. It is a statistically insignificant reduction in inflation, and the government will lose revenue, so it is not appropriate. “If the government wants, if it has fiscal space, it can reduce direct taxes.”
The country has a President of the Republic, and in my opinion Ms. Sakellaropoulou is a very good president, said Mr. Stournaras answering the question of Aris Portosalte if we will see him as President of the Republic.
Also speaking about the Recovery Fund, he emphasized that the structural changes associated with it are a benefit.
