Prime Minister Kyriakos Mitsotakis’ interview on Bloomberg TV with journalist Francine Lacqua

(Dimitris Papamitsos / Greek Prime Minister's Office)

Francine Lacqua: If you’re a world leader, if you’re the Prime Minister of Greece, of course you want to try and temper the impact this has on your population, which is why Prime Minister Mitsotakis -joining us now- put this very clear Six Point Plan addressed to the Commission. Prime Minister, where you lay out, first of all, a cap on that Title Transfer facility of fluctuation on the band so that it doesn’t go too up toο down, stress-related on how you, for example, fix price. But the main question, Prime Minister -we have the six points. They’re clear- the main question is who pays for it? So Europe would still have to go on the main market. So in competing, for example, on the global market. So you’re competing with Asia, but also China for LNG, who will foot that bill?

Kyriakos Mitsotakis: Well, first of all, Francine, let me quickly run you through the reasoning behind this proposal. I am a centre-right politician, a believer in well-functioning free markets. The real question is whether the wholesale gas market currently is properly functioning, or whether it no longer reflects the fundamentals of supply and demand. If you just put up the chart regarding the fluctuations in what has happened in the TTF index over the past weeks, I think it is very obvious that this is no longer a properly functioning market.

So if that indeed is the case, that begs the question whether we should make a more drastic intervention to essentially reset the market, rebalance it, and make sure that we avoid excessive fluctuations which essentially have nothing to do with the fundamental supply and demand. And this is at the essence of what I’m proposing to the Commission. I understand this is a bold proposal, but at least it places the essence of the dilemma squarely within the Council that will discuss this issue tomorrow.

Francine Lacqua: Prime Minister, should the EU then actually use funds from its emergency fundraising bond program to bridge this gap?

Kyriakos Mitsotakis: It would have the capacity to do so if it so chooses. Again, we should not forget that when we put together the Recovery and Resilience Fund, the NextGenerationEU, after the pandemic, there were many European leaders who thought that this was completely inconceivable, even a few months before it actually happened.
So, we are facing a very extreme situation. If you just look at the impact that these price increases have on electricity bills, not just in Greece, but in many European countries, you understand the pressure we are placing on our citizens. And, of course, we do subsidize electricity bills -all European countries do so- but I believe that we need a more systematic intervention. I mean, there are other ideas that have been tabled, for example by Spain, regarding the way the actual electricity market is functioning. So what I am advocating is a European-wide solution to what is essentially a European problem.

Francine Lacqua: Yeah. And again, they’re bold proposals. The specific proposals, though, can help at the margin, but again, it could actually hurt liquidity out there, because the real problem is that there’s just not enough gas. So how does Europe deal with that?

Kyriakos Mitsotakis: The gas supplies haven’t fundamentally changed, which begs the question, why have we seen these very dramatic increases in the price of gas if the supply of gas has more or less stayed steady? That is why I’m arguing that here we have a fundamental problem of a market that is not properly functioning. Obviously, in the medium and in the long term the Commissioners put forward a very bold plan regarding Europe moving faster away from natural gas. But this, again, is a process that cannot take place from one day to the next.

So, what I’m advocating is a short-term intervention in the pricing structure of the wholesale gas market. And, of course, we will discuss how quickly we can move forward in terms of decarbonisation, in terms of renewables, in terms of the “Fit for 55” agenda. We have already taken our decisions. But, moving away from gas at a very fast pace, of course requires more time than we currently have at our disposal.

Anna Edwards: Prime Minister, good morning. And with that, I wanted to ask you about. Does Europe have the bandwidth to do this “Six-point plan”, which is about a short-term solution, I suppose, to a much longer term problem, which is exposure to Russian gas supplies. Does Europe have the bandwidth to do that and at the same time do the important work of trying to diversify energy sources? Could this just be a distraction from the longer term project?

Kyriakos Mitsotakis: No, I don’t think it is a distraction, because I think we need to do both at the same time. Again, what I’m advocating is a short-term solution to what is a problem that has appeared in a very acute manner over the past months, not reflecting the fundamentals of supply and demand.

At the same time, it is clear within Europe that we need to move away in terms of our reliance on Russian gas as quickly as possible. Again, this is not going to happen from one day to the next, and we already have – I would argue – a relatively robust plan in terms of our “Fit for 55” agenda of how to decrease, over time, our dependence on fossil fuels.
So, what I’m arguing is that we need to look at both the medium and the long term, but also the short-term disruption is so massive and is imposing such a big burden on our consumers, but also on our businesses, that it will no longer be manageable at the level of the national budgets.

Francine Lacqua: Clearly there are many views in Europe about whether energy from Russia should be banned at this time, following what has happened in the United States and, to some limited degree, in the UK as well. Prime Minister, is Greece one of the countries that wants to see a ban on Russian energy imports into Europe and over what timescale?

Kyriakos Mitsotakis: I do not think that an immediate ban on Russian imports of natural gas is a realistic proposition at present.

Francine Lacqua: Do you think that Moscow will stop shipments first so that we don’t even need to think about banning, Prime Minister? Because they will get there first and stop selling to Europe?

Kyriakos Mitsotakis: I don’t know. Ιf that were to happen, we of course need to be ready for that eventuality. For example, Greece is importing a little bit more than 2 BCMs of Russian gas. We have contingency plans. We have LNG facilities. We’re significantly investing in terms of upgrading our FSRU capabilities in order to import more Liquefied Natural Gas over the medium-term. So we have contingency plans. This is the worst case scenario, obviously, what you are describing. We need to be ready for every eventuality.
But you asked me if I believe that we can unilaterally, as Europe, move away from Russian gas from one moment to the next. And my answer is that this is probably not a realistic proposition.

Francine Lacqua: Prime Minister. Thank you very much for your time. We appreciate it.