Prime Minister Kyriakos Mitsotakis’ interview with journalists Nicole Bastian and Gerd Höhler on the German newspaper Handelsblatt
Handelsblatt: Mr. Prime Minister, you met Olaf Scholz when he was Finance Minister, and now you see each other again at the EU Council. What are your hopes for the new German chancellor?
Kyriakos Mitsotakis: I know him and I am very confident that we will establish a good, honest channel of communication. I think the German government has set ambitious goals, on structural reforms, digitalization and the climate, for example. And I’m aware that as finance minister at the time, he was very supportive of the EU’s Reconstruction and Resilience Fund.
Handelsblatt: Do you refer to the 720 billion euro EU fund with subsidies and loans for the member states that was decided on during the pandemic?
Kyriakos Mitsotakis: I think this is a very important step towards European integration. Now it’s up to us to prove to those who are a bit more skeptical that we are using the funds for good purposes, to boost investment and growth.
Handelsblatt: How do you see the role of Germany’s new Finance Minister Christian Lindner, who was a major critic of Greece during the euro financial crisis?
Kyriakos Mitsotakis: I was pleasantly surprised by what he said about the Greek economy in recent days. It’s good that it is now clear in Germany that a lot has changed in Greece in the past two years. We have put our finances in order and pushed through real reforms that will ensure that we never have to go through another debt crisis like the one we experienced. I was pleased to see Mr. Lindner acknowledge this important element in view of the debate on the reform of the EU Stability and Growth Pact.
Handelsblatt: This is an important issue for you…
Kyriakos Mitsotakis: I think we all agree that the rules need to be changed because the current guidelines are obsolete. We need a new framework that ensures financial sustainability – I’m the first to insist on financial sustainability because our debt ratio is still high. But on the other hand, such a framework must also ensure that we do not impose unnecessary austerity, killing the growth we all seek.
Handelsblatt: What exactly do you think such rules on deficit and debt levels might look like?
Kyriakos Mitsotakis: I’m not going to give exact numbers on that. But it’s about a set of rules that allows more flexibility and a slower way to reduce the debt. Maybe we should also treat some types of spending differently in the deficit calculation.
Handelsblatt: What are you thinking about?
Kyriakos Mitsotakis: We all know that we will have immense spending to finance the transition to climate neutrality. We’re doing that partly through EU funds, partly through national funds. These investments generate income in the medium and long term. Therefore, we should allow higher deficits in the short term. Or take defense. We talk a lot about strategic autonomy. For that, too, we have to invest first.
Handelsblatt: France is proposing individual debt targets for individual member states. Are you also in favor of this?
Kyriakos Mitsotakis: We already have them. The Commission’s country-specific recommendations for the reconstruction and resilience fund are exactly that – and the right approach.
Handelsblatt: But when it comes to the stability criteria, we have the same rules for all member states: three percent for the deficit and 60 percent for debt – even if hardly anyone can meet these at present.
Kyriakos Mitsotakis: That’s why these hard targets are no longer relevant.
Handelsblatt: But they are common targets. Some experts want to keep that, but the French government wants to change it. Do you?
Kyriakos Mitsotakis: The French approach is in principle a good starting point for a discussion in which we say, for example: look, we may have a high debt ratio, but our debt has special characteristics: A high proportion is bilateral with a low interest rate. That’s why our debt service is significantly lower than our debt ratio would suggest.
Handelsblatt: If we had individual targets for each member state and special rules for investments in defense, the environment or digitization, aren’t we moving into a world without solid stability targets?
Kyriakos Mitsotakis: That’s exactly what we need to discuss. We need to maintain the necessary fiscal discipline to make a common monetary union work. At the same time, we should accept that we have different starting points and need to gradually align. I don’t have a final answer there either. This will be a difficult discussion. We should start with the premise that we have to be smarter so that we arrive at a solution that opens up all our options.
Handelsblatt: Will that be possible without amending the Stability and Growth Pact?
Kyriakos Mitsotakis: I hope so, because amending the treaty is very complicated. We should approach it with the hypothesis that we are maneuvering within the framework of the existing treaties.
Handelsblatt: In Germany, there is a suspicion that a southern alliance of Greece, France and Italy is emerging in this debate. These countries have common interests because of their high debt ratios, or so the perception goes. Is that true?
Kyriakos Mitsotakis: An alliance to protect entrenched self-interests or outdated bad practices would be a bad alliance. But if it’s an alliance of reform that drives Europe to seize the opportunities of the future, then that would be a good alliance, wouldn’t it?
Handelsblatt: Are you working on that?
Kyriakos Mitsotakis: I speak frequently with President Macron and Prime Minister Draghi. I see us as a group of like-minded countries: Countries – at least I can say this for Greece – that were considered unreformable but are now at the forefront of reform.
Handelsblatt: Greece is still met with skepticism….
Kyriakos Mitsotakis: I know. We saw that in the debate about the Corona reconstruction fund. Many in the North may have believed back then: why should we give money to these people? The politicians will spend it on subsidies to get re-elected. But that’s exactly what we’re not doing. If we use the money from the RRF for a good purpose, then I’m sure it will become a permanent institution.
Handelsblatt: Do you believe that the reconstruction fund will become a permanent instrument?
Kyriakos Mitsotakis: I expect it to. Because then we would have the opportunity to borrow together at European level to finance crucial investments for the future of the EU on favorable terms.
Handelsblatt: That sounds quite different in Germany or Scandinavia – the RRF is seen as a unique crisis instrument. Why should that change?
Kyriakos Mitsotakis: We have three or four years ahead of us in which we must work hard to ensure that the money from the reconstruction fund is used wisely, especially in the large recipient countries in the south. That is the litmus test. After that, we can start the discussion on a permanent instrument.
Handelsblatt: What investments do you have in mind for a permanent joint fund?
Kyriakos Mitsotakis: First and foremost, tackling the climate crisis. Global warming is the biggest challenge facing our generation. The necessary infrastructure investments exceed the financial capabilities of individual states.
Handelsblatt: When we talk about European cooperation: Is it sufficient in the fight against the Covid pandemic?
Kyriakos Mitsotakis: The joint procurement of the vaccine and distribution according to per capita quota was a courageous decision and an important sign of European solidarity. We proposed the European digital vaccination certificate from Greece, and it works. The European Medicines Agency (EMA) guidelines are important for us. But things like vaccination strategy should continue to be up to the individual member states.
Handelsblatt: That also applies to the question of mandatory vaccination?
Kyriakos Mitsotakis: I don’t think it would be legally possible to have a pan-European vaccination mandate at the European level. We did it in Greece first for hospital and nursing home staff and then for everyone over 60. That was a difficult step – constitutionally sound in our case. But it might not have been possible in other countries.
Handelsblatt: In the past decade, Greek relations with Germany have not been the best. Is there an improvement in sight?
Kyriakos Mitsotakis: Definitely. We have already seen an improvement under Chancellor Merkel. For us, it is important to change the narrative of the relationship. It is no longer a debtor-creditor relationship. It is a relationship between two EU member states that can strengthen their cooperation in the Union, but also bilaterally, to strengthen the growth of both economies, improve relations among people and overcome stereotypes and prejudices.
Handelsblatt: Merkel has been a dominant figure in the EU. Will that change with Olaf Scholz – and with it, perhaps, the balance of power of the southern states in the Union?
Kyriakos Mitsotakis: I don’t think this is a question of North versus South, East versus West. At least, that’s not the context in which the debate should be conducted. Germany is the largest country in Europe. And the largest country always has a weight in the European Union proportional to its contribution. Angela Merkel had enormous experience in building consensus, even in difficult negotiations.
Handelsblatt: Will anything change there?
Kyriakos Mitsotakis: I don’t think so. At the end of the day, German politics is characterized by predictability and continuity. Perhaps Chancellor Scholz will use his expertise to become even more involved in financial issues. And in his domestic policy, I see a big focus on infrastructure investment, jobs, digitization and green change. These are exactly the things we are also wrestling with. With the phase-out of coal, for example.
Handelsblatt: Should nuclear power be recognized and subsidized as green energy in the EU?
Kyriakos Mitsotakis: I am firmly convinced that we cannot achieve our climate targets without gas and nuclear power. Greece has no nuclear power plants, and we will never have any. But when I look at the overall energy mix in the EU, I can’t see how we are going to get to CO2 neutrality without nuclear power.
Handelsblatt: You met Vladimir Putin in Sochi last week. Is there a threat of a Russian invasion of Ukraine?
Kyriakos Mitsotakis: My impression is that all sides want to de-escalate. This is also the message I conveyed to President Putin.
Handelsblatt: And if it does come to that? How should the EU and NATO react then?
Kyriakos Mitsotakis: We would all lose if there is an invasion. The consequence would be new, tough sanctions. That would make a reasonable solution even more difficult. I have hope, and this is also what my gut feeling tells me, that all parties involved will recognize the great risks of escalation and seek détente.
Handelsblatt: How should the EU generally deal with authoritarian regimes like Russia, China, Saudi Arabia?
Kyriakos Mitsotakis: Our strength derives from our values and principles. They provide a framework that guides us in our relationships with other countries. We talk to all countries, we trade with them and some are also strategic partners, but we never compromise on human rights and the rule of law. This is what the EU is all about.
Handelsblatt: And what about problematic countries within the EU, such as Poland or Hungary?
Kyriakos Mitsotakis: We expect the same from ourselves as we do from others.
Handelsblatt: Do you see any chances for a rapprochement between Greece and Turkey? Can the EU and Germany help with this?
Kyriakos Mitsotakis: I am an eternal optimist and I am always ready for cooperation with Turkey. But Turkey must understand that it cannot bully Greece and Cyprus. Since 1995, Turkey has been threatening us with a “casus belli,” or military attack, if we extend our territorial waters in the Aegean to twelve miles, which international law allows us to do. This threat of war is incomprehensible.
Handelsblatt: What does the EU say?
Kyriakos Mitsotakis: On this issue, I have achieved the full support of the European Council. How Turkey performs in the Eastern Mediterranean concerns Europe as a whole. Think of irregular migration. Or the fact that Turkey is blocking our plans for a natural gas pipeline from Israel and Egypt via Cyprus and Greece to Europe. That is tangential to Europe’s energy security.
Handelsblatt: Would you like to see more support from Germany in these disputes?
Kyriakos Mitsotakis: I think Chancellor Merkel has made an honest effort to mediate. But we want Germany’s support. Germany is not an uninvolved, neutral third party. We belong to the same European family.
Handelsblatt: What can Greece do itself?
Kyriakos Mitsotakis: I don’t want a confrontation with Turkey. We are neighbors. I am talking to President Erdogan. We have every interest in working together. If Turkey is currently experiencing an economic crisis, that does not make us happy. Because that could lead to regional instability.
Handelsblatt: What is your message to Erdogan?
Kyriakos Mitsotakis: We rely on reason in our relations. We are not the ones fantasizing about the glories of past empires. Let us look to the future instead of the past!
Handelsblatt: Mr. Prime Minister, thank you for the interview!