Lagarde Praises Greece's Economic Turnaround and Progress on Banking Reforms, But Warns of Geopolitical Uncertainty
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Greece has made an impressive economic turnaround thanks to fiscal reforms and the efforts of the Greek people and authorities. The debt-to-GDP ratio has fallen and credit ratings have improved.
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The threat of Grexit was most serious in 2015, but was avoided thanks to the determination of European leaders. Some mistakes were made in handling the crisis initially.
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Lessons learned include the need for fiscal guardrails in the eurozone and following through on reforms once decided. A robust banking system is also crucial.
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Lagarde is satisfied with progress made in consolidating the Greek banking system, reducing non-performing loans, and increasing capital ratios.
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Multiple concurrent geopolitical crises are creating uncertainty and fragmentation compared to the past. Bringing down inflation is the ECB's key focus despite political pressures.