John Iannis Mourmouras: Post-MoU Greece - five proposals

Speech by Professor John Iannis Mourmouras, Deputy Governor of the Bank of Greece, at the 2nd International Conference, organised by the Economic Chamber of Greece, Athens, 31 May 2018.
Central bank speech  | 
11 June 2018

Your Excellency, Mr. President of the Hellenic Republic,

Ladies and Gentlemen,

Introduction

After 8 years of hardship and thanks, on the one hand, to the big sacrifices of the Greek people and, on the other hand, to the solidarity of our European partners as this is manifested by the unprecedented amount of loans given to our country on truly concessional terms (very low rates and long maturities), Greece is finally coming out of the tunnel with optimism. Although the international economic environment and indeed the situation in our neighbourhood is pretty unstable right now, I believe the Greek case is manageable for an exit from the MoUs in late August without a precautionary credit line – which would be effectively a mini-fourth MoU. Such an exit, after all, would be similar to the cases of Portugal, Ireland and Cyprus. I will seize the opportunity of this conference organised by the Economic Chamber of Greece, thriving under the leadership of Konstantinos Kollias, taking place in this magnificent masterpiece of world architecture named after a global business leader, Stavros Niarchos, to make 4 new proposals, and repeat an old one, towards achieving this sort of exit and beyond, and the emphasis is on the “beyond”. Then I will briefly ask what went wrong in the case of Greece. I have written extensively on this subject during the period 2010–2014 with my previous hats, including the professorial one. The important thing is to look forward, but history matters and the lessons drawn with regard to member countries of monetary unions are of paramount importance. And finally I will look at the significant role that the ECB played in the adjustment programmes in the four countries and, more generally, in the South of Europe (including Spain and Italy), among other things in providing liquidity and effectively saving the euro, because, as you know, that was at stake in the end.

Before coming to the main topic of my speech, five proposals on post-MoU Greece, a digression may be in order on Italy.