Yannis Stournaras, Governor of the Bank of Greece (BoG), described the reintroduction of a 13th pension as ‘fiscal madness’ during an interview on OPEN TV today (24 July 2026). He was responding to questions about measures taken by the Greek government during the bailout memoranda period.
No threat to pensions, says BoG chief
Pressed on whether pension payouts are at risk again — given concerns that the Social Insurance Institute (EFKA) could run deficits due to demographic pressures — Stournaras was categorical: ‘No, absolutely not.’ He stressed that reforms implemented under the memoranda ensure the long-term sustainability of the social security system’s surplus for many years to come.
‘Fiscal madness’ defined
When asked about reported deficits of €1.3 billion projected for 2029 — referencing a Kathimerini report — Stournaras dismissed the figure, saying such shortfalls would only materialise ‘if we commit fiscal madness.’ He warned against reverting to pre-crisis policies, particularly those pursued in the second half of the 2000s: ‘That would be madness.’
He defined ‘fiscal madness’ as introducing benefits unsupported by either fiscal space or productivity gains — measures that lack a real economic foundation and would inevitably lead Greece back into difficult financial territory.
System remains sound — but discipline is key
Stournaras noted the importance of professional pension funds and confirmed that the government has already taken corrective action. He pointed out that the current budget allocation for the social insurance system stands at €17 billion — underscoring the need for strict fiscal management. ‘We must ensure sound public finances,’ he said, adding that continuity is essential: ‘We must never return to that forgotten era when pensions and wages were set far beyond what the system could sustain — far beyond productivity growth.’
He also highlighted the completion of the TEKA reform — a capitalisation initiative — noting that Finance Minister Karamanlis’ current efforts mirror steps already taken by nearly all other European countries.
On global tensions and interest rates
Asked about rising geopolitical risks — including renewed conflict in the Strait of Hormuz — and their potential impact on global and Greek economic stability, Stournaras declined to comment on possible interest rate changes. Citing the central bank’s ‘quiet period’ ahead of upcoming monetary policy decisions, he stated: ‘I cannot comment at all — it’s strictly prohibited. We’re barred from speaking on this topic one week before the decision.’
Greece as Europe’s ‘crisis laboratory’
In a notable reflection on Greece’s broader role, Stournaras called the country ‘the mother of history’ — not in a mythological sense, but as the catalyst that forged Europe’s crisis-response architecture. ‘Had it not been for Greece’s crisis, today the European Union, the European Central Bank, and the European Stability Mechanism would not possess the tools they now have to manage crises.’
Finally, when asked whether the Greek economy faces renewed risk, Stournaras gave a clear answer: ‘No.’