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Bank of Greece head: Weak institutions, political system reasons why Greece still in bailout

Greek central banker, governor of Bank of Greece, Yannis Stournaras pointed to instability on the part of institutions in the country, as well as a lack of credibility and courage on the part of the domestic political system to “tell the people the truth”, as the primary reasons that Greece has still not ended its dependence on bailout memorandums [bailout agreements].

In an interview carried in the Athens daily “Kathimerini”, the influential Bank of Greece (BoG) governor and former finance minister described crisis-bedeviled Greece as such: “… we were in a boat taking on water, and instead of closing the hole, we were back-stabbing each other.”

He also pointed directly to the fact that other Euro zone countries that entered bailout and readjustment programs, the now infamous memorandums, after Greece have since exited, and are now posting economic growth.

In citing what he called weaker institutions in the country, compared to other EU states, Stournaras mentioned GDP growth of 8 percent in 2016 for Ireland, as well as economic recoveries in Cyprus, Spain and Portugal, before delving back centuries to find an answer, or a component to the answer, for Greece’s sluggish performance.

“Why? Because, according to some, we (the Greek nation) did not experience the Enlightenment, as we were under Ottoman occupation …” he said, in pointing to the weaker institutional framework in the country, compared to modern European standards. (naftemporiki)

If I am not wrong – and I am not wrong -, Yannis Stournaras was Greece’s finance minister from July 2012 until June 2014 in conservative New Democracy/socialist PASOK coalition.

I am sure the second bailout agreement bears his signature.

Apparently he served the country much too short in order to be able to make the institutions strong and the political system reliable, credible and courageous.

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  1. Besides his own (huge) personal responsibilities when in office, he says nothing about the harsh spending cuts and taxation imposed via the Greek programme, at rates almost triple than those of, say, Portugal and Ireland. This is why these countries can recover (they have not done so yet) and Greece cannot. The Greek programme failed because of humongous austerity and the looting of the PSI, which resulted in an unprecedented recession of over 25%, not because politicians would not tell the truth. Apparently the (as it were) Governor did not read or understand the IMF report on the multiplier effects of austerity on growth. It is he, who in pursuit of the salary and perks of the Governor’s office, would do anything to please the criminals of the Troika and their masters.

  2. Stournaras was one of the many incompetent so-called economists who had nothing to say about Greece joining the eurozone. Thus far, all the third-rate Greek economists who promoted eurozone membership have either been given top state jobs — such as Stournaras and Papademos — or have been given permanent professorships in Greek universities (without having serious publications, of course).Not one person has been criticised for professional incompetence and neglect of duty. Whereas the few who questioned the wisdom of eurozone membership have been ignored, and continue to be ignored.