Stournaras-VAT. It would have been a mistake to reduce the value-added tax rates, as the opposition demands, argued Bank of Greece Governor Yannis Stournaras on Monday, speaking on Skai Radio. He added that if there is margin for tax breaks in the budget, the government had better reduce social security contributions and direct taxes.
Bank of Greece Governor Yannis Stournaras announced new cautious interest rate cuts by the European Central Bank.
Speaking at an event organized by the Hellenic-French Chamber of Commerce and Industry on Thursday, he said that “the easing of monetary policy should continue with a series of interest rate cuts in the next few meetings of the ECB Governing Council. However, due to the increased uncertainty, our moves should be gradual and cautious and continue to be based on the currently available data. Of course, larger reductions should not be ruled out, if incoming data indicate lower-than-target inflation in the medium term.”
However, Stournaras noted, this development is expected to affect the cost of new loans as well as floating-rate loans, and the cost of raising funds. These factors, he said, are crucial for the profitability indicators of Greek banks to remain at the current level and for lenders to achieve the goals set for credit expansion.
Nevertheless, he said that the prospects for the Greek banking sector are good.
Referring to the challenges facing the Greek economy, the governor of the Bank of Greece opposed a VAT reduction and stated that the main priority is to accelerate the delivery of justice, with the aim of improving the business environment and attracting investment, by utilizing measures such as the digitalization of procedures, the reorganization of the courts (with the implementation of the new judicial charter) and the promotion of alternative dispute resolution mechanisms.