Central Bank Governor Yannis Stournaras called on banks to continue providing uninterrupted financing to the Greek economy during his hearing before the Parliament’s Public Enterprises Committee.
It should be noted that the Committee approved the renewal of his term by a majority vote. More specifically, New Democracy voted “in favor,” while SYRIZA, Greek Solution, New Left, Niki, and Freedom Course voted “against,” and PASOK and the KKE abstained.
“He is the first governor of the Bank of Greece to serve three consecutive terms, since Xenophon Zolotas also served three terms but they were not consecutive,” noted Minister of National Economy and Finance Kyriakos Pierrakakis, adding that“Greece needs a central banker with knowledge, experience, and international standing, ready to represent our country with seriousness and credibility,” he emphasized that Yannis Stournaras, who was present during the country’s most critical moments, “was never a convenient central banker, as he spoke when he believed it was necessary and when he had to speak, anddefended difficult positions even when it came at a political cost.”
Speaking before the Parliament’s Committee on Public Enterprises, Banks, and Public Utilities, the Governor of the Bank of Greece reviewed his work and focused particularly on the rise of protectionism, geopolitical tensions in the Middle East, and ongoing disruptions in supply chains, emphasizing that these developments are already weighing on Europe’s growth prospects.
Among other things, he noted:
- the possibility of a prolonged closure of the Strait of Hormuz, noting that this development has already led to a sharp rise in oil and natural gas prices, with the risk of triggering secondary price increases in goods and services.
- the risk of a new wave of stagflation —that is, a combination of low growth and high inflation—noting that European economies, as net energy importers, are particularly vulnerable.
- to increased volatility in financial markets, rising government bond yields, and the risk of a sharp correction in financial asset prices globally.
- the “extremely delicate balance” for central banks, noting that on the one hand, a return of inflation to the 2% target must be ensured, while on the other hand, they must avoid an overly restrictive policy that could harm investment and growth.
In the event of a temporary overshoot of the inflation target, he noted that a “balanced response” is required, meaning a cautious tightening of monetary policy without stifling economic activity.
For 2025, he said growth stood at 2.1%, higher than the Eurozone average, driven primarily by investment and private consumption, and that foreign direct investment reached historic highs, reflecting, as he noted, the improvement in the investment climate and international markets’ confidence in the Greek economy.
However, he emphasized that inflation remained higher than the Eurozone average, standing at 2.9% in 2025, while for 2026 the Bank of Greece forecasts growth of 1.9% and inflation of 3.1%.
In closing, the Governor of the Bank of Greece made it clear that the risks to growth are mainly on the downside, while those to inflation are on the upside, with geopolitical developments in the Middle East being the key source of uncertainty.
Source: Ertnews