The governor of the Bank of Greece, Giannis Stournaras, spoke in favor of a 25 basis points reduction in interest rates at the European Central Bank meeting in December.
Yiannis Stournaras also advocated a reduction in interest rates for each ECB meeting until it reaches the neutral rate which is at 2%. He even mentioned that it is too early to talk about whether the ECB should go for a more expansionary monetary policy (ie below the neutral interest rate threshold).
Speaking on Bloomberg TV, Yiannis Stournaras did not rule out the possibility of a mild recession in the event of the imposition of tariffs by the Donald Trump administration, if he follows through on his pre-election announcements and went on to say that Europe will have no choice but to make a similar move .
He warned that there should be no barriers to trade and said the ECB was afraid of stock market volatility. He emphasized that there is also concern about the public debt part and added that the ECB remains data dependent, that is, it mainly bases itself on what the data say.
Regarding the increase in negotiated wages, Yiannis Stournaras stated that the figures for the third quarter that showed an increase were a deviation.
Regarding the issue of Central Bank independence and some comments heard from the Trump camp about the current head of the Fed, Jerome Powell, the Greek central banker said that Powell is an excellent central banker and considered this issue more important than the customs duties.
Although, as he estimated, the new presidency in the US will not make any changes to the FED’s statute, he commented that if it did so, it would have significant global consequences and would affect the global markets, primarily those of bonds.
Source: ot.gr
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Here are two PAA related questions for the provided text:
## World Today News: In-Depth Discussion on ECB Interest Rates, Tariffs, and Global Economic Outlook
**Host:** Welcome to World Today News! Today, we delve into the complex landscape of global economic trends with two esteemed guests: [Guest 1 Name & Expertise] and [Guest 2 Name & Expertise]. We’ll be discussing recent comments by the Governor of the Bank of Greece, Giannis Stournaras, regarding ECB interest rate policy, the potential impact of US tariffs, and the role of central banking independence.
**Section I: ECB Interest Rates and Economic Outlook**
**Host:** Governor Stournaras advocates for a 25 basis point interest rate reduction at the upcoming ECB meeting and further gradual decreases until reaching a neutral rate of 2%.
**Guest 1:** Do you agree with Governor Stournaras’ stance on interest rates? What factors do you think the ECB should consider when making this decision?
**Guest 2:** Beyond the immediate impact of rate changes, what are the potential long-term consequences for the Eurozone economy if interest rates are lowered significantly?
**Host:** Governor Stournaras mentions that the ECB is “data dependent.”
**Guest 1:** What specific data points are most crucial for the ECB in formulating monetary policy, and how do current economic indicators align with those data dependencies?
**Guest 2:** How can the ECB balance the needs of different Eurozone member states with varying economic conditions when implementing monetary policies?
**Section II: Potential Impact of US Tariffs**
**Host:** Governor Stournaras raises concerns about the possibility of US tariffs and the potential for retaliatory measures by Europe
**Guest 1:** What specific sectors and economies within the Eurozone are most vulnerable to the impact of potential US tariffs?
**Guest 2:** Do you believe that retaliatory tariffs from Europe would be an effective response to US trade protectionism? What are the potential consequences, both positive and negative, of such a move?
**Host:** Governor Stournaras emphasizes the importance of free trade. What are the broader implications for global economic growth and stability if trade barriers increase significantly?
**Guest 1:** How can international organizations like the WTO play a role in mitigating trade tensions and promoting open markets?
**Guest 2:** What are some alternative strategies that countries can pursue to address concerns regarding trade imbalances or unfair trade practices without resorting to tariffs?
**Section III: Central Bank Independence and Global Financial Markets**
**Host:** Governor Stournaras asserts that Jerome Powell is an “excellent central banker” and stresses the importance of central bank independence.
**Guest 1:** How crucial is central bank independence for maintaining stable financial markets and achieving long-term economic goals?
**Guest 2:** Recent political rhetoric has raised concerns about potential interference in the operations of central banks. What safeguards are in place to ensure the integrity and independence of institutions like the Fed and the ECB?
**Host:** Governor Stournaras warns about the potential global consequences if the statute of the Federal Reserve were to be altered.
**Guest 1:** What are the potentially destabilizing effects of undermining the independence of powerful central banks on global financial markets?
**Guest 2:** How can global policymakers work together to uphold the principles of central bank independence and promote a stable and predictable international financial system?
**Conclusion:**
**Host:** Thank you to our esteemed guests for joining us today and providing valuable insights into these critical issues facing the global economy. This has been an informative discussion on the intricate web of relations between ECB policy, trade tensions, and the role of central banks within the international financial landscape. We encourage our viewers to continue engaging with these important topics.
