Stournaras Pushes Greek Reforms

Greek Central Bank Governor Yannis Stournaras

ATHENS – Bank of Greece Governor Yannis Stournaras said the government must quickly implement reforms it agreed with international lenders.

Stournaras said key to the deal reached with the Quartet of the European Union-International Monetary Fund-European Central Bank-European Stability Mechanism (EU-IMF-ECB-ESM) was dealing with a mountain of bad loans weighing down banks.

Greeks crushed by austerity measures have been unable to pay their loans, credit cards and mortgages. The former ruling New Democracy and PASOK Socialists owe 250 million euros ($282.7 million) aren’t paying and aren’t being chased while banks and collection agencies hound debtors.

The government said it will allow more outside agencies help banks try to collect from people, many of whom say they can’t pay because of big pay cuts, tax hikes, slashed pensions and job losses.

“These actions will have a positive impact on the international markets’ assessment of the country’s prospects and will lead to a virtuous cycle that will mark a definitive exit from the crisis,” he said.

He also called for the primary surplus – which doesn’t include interest on debt, the cost of social security and the military and state enterprises – to be only two percent of Gross Domestic Product (GDP) instead of the 3.5 percent which the Quartet wants.

In a speech before the Federation of Industries of Northern Greece, Stournaras said changing the budget target would help provide the Greek economy with a much-needed boost “without undermining the sustainability of the public debt,” Kathimerini said.