Prime Minister Kyriakos Mitsotakis’ remarks during the discussion entitled «European Green Deal, Anyone?», in the framework of the World Economic Forum in Davos

Prime Minister Kyriakos Mitsotakis participated in a discussion entitled “European Green Deal, Anyone?”, in the framework of the World Economic Forum in Davos. The debate was also attended by Maroš Šefčovič, Executive Vice-President of the European Commission for the European Green Deal, Maxim Timchenko, Chief Executive Officer of DTEK, and Ester Baiget, President and Chief Executive Officer of Novozymes. The debate was moderated by Euronews’ Senior Business Editor Sasha Vakulina. The Prime Minister’s remarks follow:

On the future of the European Green Deal

I continue to be profoundly bullish about the future of the Green Deal, because when this discussion started a few years ago, the main argument in support of the Green Deal had primarily to do with the importance of reducing emissions in order to protect the environment. We’ve been subject to catastrophic floods, for example, this summer, the necessity to play a leading role in this transition. Since then, we’ve had a geopolitical shock, and it has also been incredibly clear that some of the solutions offered by the Green Deal also make profound economic sense.

Just look, for example, at Greece, our penetration of renewables, how cheap renewables are. I mean, there are hours during the day when we actually have negative prices.

So I think there is a general understanding that we need to push forward with this agenda and essentially probably segment it into three sectors: those technologies which are already mature and competitive, where we can actually play a leading role, those technologies which may need some additional help, additional subsidies in order for them to actually be able to become effective, and those technologies which are still further into the horizon, where we need to be sure that at least Europe plays a leading role in terms of actually developing them.

So, from the perspective of Greece, and again, as a country which plays a dominant role in the production of electricity from renewables, I continue to be very bullish about the Green Deal and very much supportive of the initiatives by the Commission. Granted, this is not something that may reflect the political realities in all member states, but I think it is important to highlight the progress that we have made and to add on top of that the significant resources provided by the RRF regarding the green transition. For Greece, this total envelope exceeds 36 billion euros. More than 25% of that is directed towards the green transition. So I would argue that we also have significant financial firepower from the European Union in order to make that happen.

On energy security and the geopolitical position of Greece

We are currently a net importer of energy. And just to put this into context, when Greece decided four years ago to aggressively move away from coal, we decided to use natural gas as a transition fuel. We don’t have nuclear, so it was the only obvious choice. We spent €7 billion in 2022 importing natural gas. Normally this bill is 1 billion, just to put things into context.

So we said that in the short term, we want to be an energy provider for at least the Balkans, by building strong interconnections, pipelines, floating storage and regasification units in northern Greece. Leverage our unique geographic potential, possibly even, if necessary, export gas up to Ukraine. Because if you actually look at the map, the distance is not that far. But in the medium to long term, we aspire to be exporters of green energy by harnessing the significant potential that we have, in particular when it comes to offshore wind.

If you look at the map of the Mediterranean, the place where you have the maximum amount of sustained, constant, strong winds is the Aegean Sea. So part of our medium to long term plan is to really make a breakthrough when it comes to offshore wind. But in order to do that, we also need to beat the necessary interconnections.

If we want to have a European market of renewables that seamlessly sends energy across the continent, we need to focus more on grids and on interconnections. I think we realised with some delay that this is a necessary investment that we can make. And if you look at the macro picture of how European renewable energy is produced, you will realise that you have a surplus of wind energy in the north in the winter and you have a surplus of solar energy in the south in the summer. But we can still not leverage these geographic realities.

So we aspire to play a leading role in the short term as providers of energy security to help also some of our Balkan friends decarbonize faster. But we also hope that we will be a net exporter of green energy in the medium to long term. And I can tell you there is already a lot of interest to invest in this sector.

Finally, we should also look at the interconnections with Africa. Africa has significant, if not unlimited, potential to produce green energy, particularly from solar. We are in discussions with Egypt to build an interconnection that will connect Greece to Egypt. And of course, I think these are all projects that should be within the project of European common interest framework. Because they’re not particularly important just for Greece, they’re important for Europe as a whole.

On the allocation of EU funds

First of all, just to build upon what you said regarding the leverage that we have, which sometimes we seem to be reluctant to use. We had discussions at the level of the European Council during the big energy crisis of 2022. And it took us months and months and months to agree the Council, with the support of the Commission, when it actually had come in favour of the solution way before others realised it’s important to place, for example, a cap on natural gas and to use our power as big buyers of gas to address what was clearly an obvious market distortion. So we did it, but we didn’t do it fast enough.

On the other hand, when it came to Covid and vaccines and the RRF, we were incredibly effective. And when it comes to supporting our businesses and improving European competitiveness, let me just flag one concern, which I have representing a medium sized European country that is just now emerging from a very painful ten year crisis. We have done a lot at the European level to pool European funds to support strategic priority for the European Union.

The Green Deal being one of them, and that is a “NextGenerationEU”. And I can tell you that the restrictions and the conditionalities imposed by the European Commission are incredibly strict. So as big recipients of RRF funds, we need to do our homework and we need to be extremely diligent in terms of making sure that what we submit to the European Commission meets the strict regulation that was put in place.

But this is a European solution and we have distributed the funds based on tested European principles. On the other hand, we have state aid and we know that we relaxed state aid rules during Covid and I think we probably obviously did the right thing. But may I just argue that the solution is not a significant relaxation of state aid rules to support companies in countries that have the fiscal space to actually do so, because if you look at where the state aid money went, 75% went to two countries, this is distorting the single market in favour of those countries that actually have stronger economies. So I would very much urge us to keep the balance right.

I’m not saying that we should not rethink our competition rules, but we need to be aware of the fact that there are countries that have the fiscal space to support their companies, whereas there are other countries that simply do not have this capacity. And this is something that needs to be acknowledged.