Giannis Stournaras, Governor of the Bank of Greece, warned that climate change, while not yet a fully systemic threat, is clearly moving in that direction unless timely and adequate measures for mitigation, transition, and adaptation are implemented.

Speaking at the 2nd International Conference “Redefining the Future Horizons: Designing the Sustainable Strategies of Tomorrow”, organised by TMEDE, Mr. Stournaras underlined the growing macroeconomic and financial risks posed by climate change, while describing Greece’s growth performance in recent years as “nothing short of a miracle.”

The Conference was held on 9–10 December at the building of the Bank of Greece Employees’ Association (SYTE) on Sina Street in Athens, under the auspices of the Bank of Greece and the Technical Chamber of Greece, underscoring its high institutional importance and the elevated level of dialogue promoted by TMEDE in the critical field of sustainable development.

Mr. Stournaras noted that extreme natural disasters, such as Storm Daniel in Thessaly, affect not only households and businesses but also the banking system, through an increase in non-performing loans. According to all relevant studies, the European South — and particularly the Mediterranean basin — is exposed to disproportionately high climate risk.

Referring to the scale of investment required for the green transition, the Governor emphasised that energy transition alone — including renewable energy sources, storage, and networks — will require additional annual investments of approximately 3–3.5% of EU GDP until 2030, amounting to €500–550 billion per year. He acknowledged that the existing European framework, including the Recovery and Resilience Facility (RRF), has contributed significantly to date, but stressed that substantial mobilisation of private capital is now indispensable, notably through the Capital Markets Union, in order to bridge the remaining investment gap.

Addressing the role of central banks, Mr. Stournaras highlighted that the Bank of Greece was among the first central banks to establish a dedicated unit — now a Directorate — for climate change. Climate considerations have been fully integrated into the Bank’s strategy, inflation and growth projections, employment outlook, and monetary policy tools. At the supervisory level, climate stress tests are conducted and clear supervisory expectations have been set, ensuring that bank portfolios adequately account for both physical and transition risks.

Mr. Stournaras also underlined that investments in adaptation and resilience deliver a “triple dividend” for society: they protect citizens and infrastructure from extreme weather events, generate new jobs and economic activity, and strengthen social awareness and preparedness in the face of climate change.

Special reference was made to the construction sector, which, as the Governor noted, has a central role to play in adaptation and resilience — through innovative, resilient materials, flood-protection projects, and urban adaptation solutions such as shading and cool materials.

“As everything ultimately passes through construction,” he stressed, “the sector is at the heart of the response.”

Turning to insurance coverage against natural disasters, Mr. Stournaras pointed out that Greece continues to face a significant insurance gap. While approximately 25% of disaster-related losses are insured across Europe, the corresponding figure in Greece remains markedly lower, at around 4%. He emphasised that neither the State nor the market alone can shoulder this burden, calling for stronger public-private partnerships, as well as a broader culture of savings and insurance among households and businesses.

Commenting on the broader trajectory of the Greek economy, Mr. Stournaras acknowledged that many citizens continue to face difficulties, but stressed that Greece has come a long way since the crisis years, when twin fiscal and external deficits reached 15% of GDP.

The prosperity level of 2009, he noted, was largely illusory, as it was built on unsustainable imbalances. In purchasing power parity terms, Greece’s per capita GDP has increased from 62% of the EU average in 2020 to around 70% today, improving at an annual rate of 1–1.5%.

As key drivers of future growth, the Governor highlighted investment, which has risen from approximately 11% of GDP in 2019 to around 17% today, as well as structural reforms, particularly in reducing bureaucracy, accelerating the justice system, addressing demographic challenges, and bridging the skills gap in the labour market.

On inflation, Mr. Stournaras observed that Greece is currently recording higher rates than the euro area average, driven by excess demand — fuelled in part by exceptionally strong tourism flows — and insufficient competition in certain markets, which allows prices to remain elevated even as international commodity prices decline. He reiterated that enhancing competition and facilitating market entry are critical to containing inflationary pressures.

Concluding his remarks, Mr. Stournaras underscored the decisive role of political stability, noting that it has enabled governments to take difficult but necessary decisions that led the country out of crisis. He warned that prolonged instability — as observed in other European countries — would undermine both economic progress and the capacity to address major challenges, with climate change foremost among them.

Conference Support

Silver Sponsors:

AKTOR Group, CREDIA BANK, EUROXX Securities S.A., INTERBETON

Bronze Sponsors:

IOLCUS, Joltie, MESOGEIOS S.A.

Supporters:

ALUMIL, ARKITON S.A., AS BUILD ATE, COSMOS AEBE, EFG Eurobank, Eldon’s Hellas, ETBA, Eurolamp ABEE, Grant Thornton, Green Edge, Premia Properties, Prudential, RENEL IKE, Hellenic Hydroconstruction S.A., ELTE, EYATH, EYDAP, Kokkinis Construction Technology S.A., Michail M. Tsontos S.A., NAMA S.A., Plethron Construction ATE, Polytechnical Redevelopment IKE, STASY, T&T Constructions S.A., TEKAL ATE

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