Bank of Greece Gov Stournaras: Interest rates have reached their highest level

Speaking to the German newspaper Handelsblatt, the governor of the Bank of Greece, Yannis Stournaras, expressed the view that interest rates in the eurozone have reached their maximum limit.

In response to the million dollar question of whether interest rates have reached their highest level, he said: “I can tell you my personal opinion: I think so. I don’t know if this is also the opinion of the majority of the Governing Council of the ECB, because we have not discussed it yet. Perhaps we will discuss it at our next meetings in 2024.”

Furthermore, he said that “the downward course of inflation meets our expectations. But the economy is much weaker than we thought in September,” while at another point he pointedly added that “Again in my personal view, I would start thinking about cutting rates if inflation in mid-2024 eases below the 3% threshold on a permanent and sustainable basis’.

Asked if the situation affects the economy , he was affirmative, as a major crisis in the Middle East involving oil-producing countries will have a serious impact on energy markets, potentially causing inflationary pressures in the short term. In the medium term, however, there is a risk of economic stagnation, not to mention the waves of refugees to Europe. This situation is indeed dangerous.

H also noted that a domino effect can happen. The conflict is already having tragic and dramatic effects on people’s lives. It can have similar effects on the economy, he opined.