Odile Renaud-Basso (EBRD): Impressive progress of reforms in Greece
Downgrading forecasts and the consequences of the war
The president of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, assesses the progress of the reforms in Greece as particularly impressive, speaking exclusively to the Athenian-Macedonian News Agency.
“There has been a huge reform agenda implemented by the current government,” Ms. Renaud-Basso said, referring to the progress made in matters of digital transition in public administration, in the governance of public companies, such as PPC.
“The reform process has been very serious, very credible and Greece’s ability to attract international investors has changed completely. Particularly symbolic of this was the acquisition of Viva Wallet by J.P. Morgan “, noted the president of the EBRD.
Worsening forecasts
Although revised for the worse, due to the current crisis, the EBRD forecasts for the growth of Greek GDP this year are 2.9% and 3.5% for 2023. At the same time, as the president of the bank pointed out, during the meetings with the Greek government it became clear that the goal of de-lignification and the green transition of the country remains unchanged, both in terms of central targeting and strategies as well as timeline.
Finally, Ms. Renaud-Basso made extensive reference to the case of Ukraine and the role that the bank plays today in maintaining economic activity on track and the role that it will play in the future in the reconstruction of Ukraine and its economy.
Following is the full text of the interview given at the 7th Delphi Economic Forum by the President of the EBRD, Odile Renaud-Basso, to the Athenian-Macedonian News Agency and NG Drossos.
Q. The European Bank for Reconstruction and Development (EBRD) funds a number of large and small projects in Greece, including the energy sector. What are your assessments regarding the effects of the current crisis on the development of the Greek economy and the future of these programs?
A. The current war-related crisis [in Ukraine] will certainly have repercussions everywhere. That, I think, is clear. It will, of course, have a huge impact on the development of Ukraine, it will have a huge impact on the development of Russia and it will of course have an impact on neighboring countries. Overall, there will be impacts on the global economy and in countries like Greece, mainly through energy prices. As there is a big shock in fuel prices. So we revised our forecasts for Greece, as the country continues to emerge from the pandemic with very strong growth, last year, and so we continue to see growth in clearly positive ground in 2022 with 2.9% and 3.5% for 2023 but of course lower than would normally be the case, i.e. without the crisis.
Q. To what extent? How much was “deducted” from your forecast?
A. 1% was deducted but as you say we have been very involved in the energy sector, for the transformation of the energy sector, and I believe that there is a huge transformation of the sector, guided by the very clear strategy of the government, through de-lignification, development of Renewable Energy Sources (RES), as it applies to key companies in the energy sector, PPC, ELPE, and we believe that the direction and the main targeting will remain and the companies to which we refer will remain in their targeting. So there may be some short-term effects of lignite adjustment in the very short term, but the focus, strategies, timeline, etc., I think remain.
Q. So, Mrs. Mr. President, the central axis is that you will continue your policy “as is” in relation to Greece and that the “to and fro” in the energy sector with the case of lignite, which you mentioned, will not affect current investments.
A. We are not investing and we are not going to invest in this sector (lignite) and I do not think there will be new investments in this sector but we are financing renewable energy sources and the sustainability policy for companies [of the sector] ( refinancing, green bond issues for PPC, etc.). This will continue and I think the current situation will boost investment in RES and this country has huge potential in this area.
Q. Were these issues addressed during your recent contacts with the Greek government?
A. Yes.
Q. And what were the main conclusions?
So, it is not really about technical assistance but about very close cooperation on a number of issues and I think we have now moved on. The progress made with non-performing loans is impressive and we are very positive about the progress we have seen in the banking system. Of course the challenge of change continues, with a greater emphasis on the digital transition as well as the financing of the economy but I think we are moving forward normally. At the same time, we support issues (securities) in the Greek market, not only for banks but also for the private sector.Q. Do you share the assessment that the current crisis is having a negative effect on the promotion of reforms in Greece?
A. We see that the government has implemented a huge reform agenda. I was particularly impressed by the (progress in) the digital transition, in management, we also discussed the “green agenda” which is a huge reform, the progress that has been made in the governance of public companies. When you see the transformation of PPC it is very impressive.
The reform process has been very serious, very credible and Greece’s ability to attract international investors has changed completely. Particularly symbolic of this was the acquisition of Viva Wallet by J.P. Morgan.
Of course, when faced with successive crises, such as the pandemic, energy prices, new challenges for economies, etc., but I think the government’s response in terms of providing support to the effects of the pandemic, not only in Greece but in the EU in general, was particularly effective in continuing economic activity and preventing collapse. I think that was the right answer.
Q. In light of your position, the problems are common to all, inflation is hitting everyone, do you think there should be an immediate united European response and then?
A. I think there is a single European reaction to energy efficiency, to the expansion of energy sources beyond Russia. Now in terms of support, I think the good thing about the case, in a nutshell, is that the RRF is now starting to take effect. You know the RRF was created to deal with the pandemic crisis but with all the negotiation, implementation, etc., the disbursement is starting now and so the impact on the economy will now begin.
Earlier the effect was more on boosting confidence, as the fact that there was a single European response to the crisis was a big step forward and gave a very strong signal of confidence, but the investment will now start and I think that will help a lot. So let’s start and see if there is a need for further follow – up. This is something that should be discussed, but I really agree that having a coordinated European response on all fronts is very important. It has been very successful in the pandemic and must continue.
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