Greek Central Bank Governor Calls for Finance Ministry to Reassess Tax Exemptions

Yannis Stournaras, the Governor of the Bank of Greece, has urged the Finance Ministry to reevaluate all current tax exemptions, considering Greece’s revenue requirements and the existence of a shadow economy exceeding 40 billion euros. This suggestion was made during his address at the ‘Kyklos Ideon’ conference.

Stournaras underscored the necessity of maintaining a careful fiscal policy aimed at achieving a primary surplus of 2% of GDP by 2024. He also anticipated wage increases in the coming year, while pointing out the potential income from the sale of Financial Stability Fund shares. Although he described these shares as relatively minor compared to rescue funds, he noted their considerable value due to benefits from the Private Sector Involvement (PSI) and substantial dividends from the Bank of Greece.

Furthermore, Stournaras discussed the interest of strategic investors in the National Bank and Piraeus Bank, following Unicredit’s interest in Alpha Bank. He noted that although half of the banks’ capitalization consists of deferred tax, he expects this interest to persist.

The central bank governor also predicted that if inflation consistently drops below 3% by August 2024, the European Central Bank (ECB) might reduce its key interest rates. He highlighted Greece’s significant reduction in debt attributed to PSI benefits and celebrated the country’s remarkable recovery from a previous state of near disaster to one of global success.