ECB’s Stournaras: High Greek Inflation Due to Strong Demand; Wage Hikes Must Track Productivity

22 September 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras said Greece’s inflation remains about a percentage point above the euro area average because domestic demand is outpacing supply, and warned that pay rises must not exceed productivity gains.

Speaking in an interview with Greece’s SKAI radio published Monday, Stournaras, who heads the Bank of Greece, said that Greek inflation had averaged 3% in recent months versus 2% in the euro area. The Bank of Greece projects a slow disinflation to 2.6% in 2026 and 2.4% in 2027, he noted.

Strong demand means “we are growing much faster than the Eurozone,” he said, adding that wages should rise “only if productivity increases” to avoid a repeat of past imbalances.

He pointed as well to improved fiscal revenues from the fight against tax evasion, saying this had created fiscal space under the EU’s more flexible rules but that high-debt countries like Greece must still allocate part of any room to debt reduction.

Stournaras emphasised that reckless pay increases or excessive fiscal giveaways could revive the conditions that led Greece to crisis.