Bank of Greece Governor Rules Out 13th and 14th Salaries

Bank of Greece (BoG) Governor Yannis Stournaras firmly ruled out any discussion regarding the reinstatement of the 13th and 14th salaries, speaking at the conference Ellada Meta VIII, co-organized by Kyklos Ideon (Circle of Ideas) -the Greek think tank- in partnership with the Delphi Economic Forum. The event focused on “Europe, Greece, and the Onslaught of New Challenges: Seeking a Frame of Reference.”

When asked about the matter, Stournaras was unequivocal. “I don’t think there is margin for a 13th and 14th salary, in our view. We are already dealing with pensions and other financial commitments, which add up to several billion euros,” he stated, reflecting the stance of the Bank of Greece.

Regarding the European Central Bank’s next moves on interest rates, he indicated that he does not foresee significant changes in monetary policy for the time being. He noted that market forecasts have shifted from expecting three rate cuts to just two, a perspective he agrees with. Stournaras predicted that the final interest rate for 2025 would settle at 2% following two reductions but stressed that this forecast was made with “great caution” due to the uncertainty caused by Trump’s trade policies.

“I cannot say for sure what will happen in April. It’s still too soon, and we need to let things settle. However, I do not rule out a 25-basis-point cut at that time,” he said. “By the end of the year, I believe the key interest rate will stand at 2.56%, which would support economic growth.”

The governor described the current economic climate as a “new reality,” with economies still undergoing a soft landing following the high inflation of 2022—avoiding a recession so far. However, he warned of emerging risks linked to the policies of former U.S. President Donald Trump.

Stournaras pointed out that while uncertainty has increased, the situation has not panned out as initially expected. Instead of strong U.S. growth and a strengthening dollar, the unfolding tariff war appears to be damaging the American economy. Inflation is likely to rise, and indicators now suggest a possible recession in the U.S. the Grek central banket claimed.

He described these developments as a wake-up call for the eurozone. “Europe has always been slow to act, taking steps only after crises emerge. But at least this serves as a wake-up call,” he remarked.
opportunity to push forward with public and private investment, as long as barriers to entrepreneurship are removed,” he emphasized.

Source: tovima.com