pay, parttime or intermittent employment. at the same time, the tax burden on dependent and independent employment has increased and social benefits continue to decline. as a result, household consumption is likely to weaken or remain subdued for a long time. despite the progress made so far, banks continue to be burdened with the management of a high stock of non - performing loans, affecting their ability to adequately support economic activity with new lending. investment remains at a very low level, and this is not only due to delays in financing the public investment programme or the lack of bank lending, but also to the fact that the investment climate in the country is still perceived as unfriendly to private investment. government debt remains very high and its servicing requires the commitment of significant public resources on a long - term basis. this can be achieved either by curtailing spending and downsizing the public sector or by increasing revenue. however, raising revenue by maintaining the existing high tax rates is a drag on growth and ultimately can have a negative impact on public finances and the manageability of public debt. this is because high tax rates discourage investment insofar as businesses know that part of their profits will, on a permanent basis, have to be spent for servicing the public debt. moreover, high tax rates are a disincentive to work, while in the case of both businesses and households they create incentives to tax evasion and the strengthening of the shadow economy. also, high taxes and social security contributions provide an incentive for businesses to relocate to european 3 / 6 bis central bankers'speeches countries with a more favourable tax regime and, accordingly, contribute to brain drain. the lack of investment and the loss of human capital hamper total factor productivity and potential output growth. 5. strengthening the growth potential 5. 1 boosting investment economic adjustment and structural changes over the last seven years have made greece more business - friendly and have created significant investment opportunities. however, domestic savings are insufficient to meet the investment needs of the greek economy. consequently, the great challenge today is to stimulate investment. and the only way to close the large investment gap is by attracting foreign direct investment, focusing on the most productive sectors of the economy. this requires, first, the rigorous implementation of the structural reforms outlined in the european stability mechanism ( esm ) programme. at the same time, the bank of greece has repeatedly proposed changing the fiscal policy mix to make it more business - and growth - friendly. this can be achieved with more emphasis on

speeches statements by yannis stournaras, governor, bank of greece governors ’ panel “ inflation : can central banks cope? ”, european forum alpbach ( efa ) 2022 30 / 08 / 2022 - speeches drivers of inflation let me first say that it is a pleasure and an honor to be participating at the european forum alpbach. upon its founding in 1945, the forum was one of the first post - war initiatives that aimed to establish a unified and democratic european community. we have come a long way since that time but, as the war in ukraine has shown, we are still some distance away from achieving the goals of otto molden and simon moser, the founders of this wonderful forum. robert holzmann has posed a very important question : what are the drivers of the very high inflation rates that we see today? it has been over a year since the euro area economy has been hit by a sequence of supply shocks - including successive waves of the pandemic - - that have pushed up inflation. we have seen a spike in fuel prices and a series of supply disruptions caused by the pandemic, which raised energy and commodity prices further. while the euro area economy was just recovering from the pandemic earlier this year, it was hit by another major shock stemming from the outbreak of the war in ukraine and the associated sanctions. the shock exacerbated the supply bottlenecks and intensified the surge in energy, commodity and food prices. these surges in energy prices have hit the euro area much harder than they hit the unites states, which is not nearly as dependent on imported energy. in parallel, as restrictions imposed to curb the pandemic waves were lifted, pent - up demand, especially in the services sector, strengthened and, as a result, upside pressures on prices broadened and intensified. if all this was not enough, in the years 2020 and 2021 the u. s. government undertook fiscal expansions amounting to 20 per cent of that country ’ s gdp – an unprecedented amount in peacetime. these fiscal expansions played a role in feeding the rise in inflation in the united states. with almost 50 per cent of global trade denominated in u. s. dollars, there were spillover effects to other countries. to contain the domestic inflationary impact, the fed has aggressively raised its policy rate, thus contributing to currency depreciations against the dollar, including of the euro, which added to