The challenges of Monetary Policy in the post-SARS-CoV-2 era and its interaction with Fiscal Policy.

Upon completion of the four-day deliberations of the 5th Simulation Conference of the European Central Bank on December 13th, now follows a series of announcements regarding our speakers, who honored us with their presence on training day and contributed significantly to the students’ constructive experience. In order of appearance, we would like to kindly thank:

• Mr. Gikas Hardouvelis, Chair of the Board of Directors of the National Bank of Greece and Professor at the Department of Banking and Financial Management at the University of Piraeus

• Mr. Dimitrios Malliaropoulos, Director of the Economic Analysis and Research Department of the Bank of Greece and Professor at the Department of Banking and Financial Management at the University of Piraeus

• Mr. Sotiris Syrmakezis, Fintech & Digital Transformation expert

• Mr. Spyros Blavoukos, Associate Professor at the Department of International and European Studies at the Athens University of Economics and Business

The Chair of the BoD of the NBG, Mr. Hardouvelis, in his keynote speech addressed the ten-year Greek economic crisis, which followed the global financial recession of 2008 that severely affected the Greek state as well as the Greek financial system, due to the reduction of Greece’s GDP caused by the crisis and its impact on the balance sheet of Greek banking institutions. Mr. Hardouvelis also emphasized the problem of restrained profitability in Greek banking institutions, listing the underlying reasons behind this complex issue. Specifically, an expansionary monetary policy implemented by the ECB and the resulting low-interest rate environment, fierce competition from Big Tech and FinTech companies and increased regulation imposed by regulating authorities are the most predominant reasons why the profitability of Greek banks is curtailed. Finally, Mr. Hardouvelis discussed the measures that need to be taken to ameliorate the situation, also noting that, through RRF and other fiscal measures adopted throughout Europe, Greece is expected to be on a path of growth in the coming decade.

The Director of the Economic Analysis and Research Department of the Bank of Greece, Mr. Malliaropoulos, in his speech focused on the importance of inflation, noting the ECB’s main policy objective on price stability, specifically keeping inflation at 2% over the medium term. Moreover, Mr. Malliaropoulos demonstrated the inflation’s upward trend and its current levels, analyzing the factors that contribute to its increase. In addition, he used the Phillips curve to explain the relationship between inflation and unemployment and how these two metrics were affected by the SARS-CoV-2 pandemic. Finally, Mr. Malliaropoulos discussed the expectations regarding inflation’s future development and shared his concerns about future economic risks.

An expert on Fintech and digital transformation issues, with 30 years of experience in the banking sector, Mr. Syrmakezis pointed out in his speech the issue of payment systems in Europe and presented possible solutions that utilize Account to Account payment technology. Specifically, Mr. Syrmakezis noted that, in the European Economy, payment systems use a number of middlemen, each of which increases transaction costs whenever a credit card is used, resulting in increasing total transaction cocts by 25 billion euros, annually. Mr. Syrmakezis continued by noting that in the next 5 years due to the increasing use of cashless payments, but also due to banks outsourcing their payment systems, the cost of accepting credit cards as a form of payment is expected to surpass 150 billion euros. Mr. Syrmakezis also mentioned different ways economic units can accept payments, known as Alternative Payment Methods (APM), through which credit card transaction costs are significantly reduced (because no middlemen are present in the transaction), user data are more secure and user experience is greatly enhanced. Finally, Mr. Syrmakezis noted that these technologies offer more business opportunities, like personalized marketing, while in recent years they have also attracted significant funding from a number of investors. 

Associate Professor at the Athens University of Economics and Business, Mr. Spyros Blavoukos, in his speech discussed Europe’s most important and historic negotiations between its states that have led to Europe’s current state of treaties and political balance. Specifically, he laid out facts on the sequence of these negotiations, the historical background concerning each one, and pointed out the factors that played a part in shaping the ECB to its present form. Additionally, he mentioned some issues regarding  the creation of the Economic and Monetary Union and the overarching political and economic views held by major European countries that were defended throughout many historic negotiations.