Michael Bröcker: Thank you very much for being on the show, Prime Minister Mitsotakis. Welcome to Germany.
Kyriakos Mitsotakis: Thank you. Good to see you again.
Michael Bröcker: How was your day in Germany? You met with the conservative leaders in trying to rebuild Europe a little bit, right?
Kyriakos Mitsotakis: We had a chance to come to Berlin as EPP leaders to also support the candidacy of Friedrich Merz to become the next Chancellor of Germany. I think it is important for us to add another member of our political family to the group of leaders at the European Council, where we already hold the majority.
But of course, Germany being the largest economy in Europe is particularly important also for our overall European agenda. We’ve laid out very clear priorities for the next five years with Commission President Ursula von der Leyen. And, of course, to have a full alignment between Germany and the priorities that we have set also as the EPP is very important. So that’s why we’re here.
Michael Bröcker: We need to enhance European competitiveness. That’s obvious. What are the two, three main reforms the European Commission, the European heads of state have to put in place?
Kyriakos Mitsotakis: I think it is very clear that we are burdened with excessive regulation in Europe, which is hampering the competitiveness of all companies, big ones, but in particular small and medium-sized enterprises. We’re looking forward to the proposal by the Commission President for an omnibus legislation that will simplify regulation across the board.
It is very clear that we need to do something about energy. Energy prices in Europe are much higher than those in the United States. But also within Europe, we see great discrepancies in energy prices.
If we want to make the green transition happen, we need to invest in our grids. The electricity grids should be treated as projects of European common interest. They could require European financing. But we need not only to bring down electricity prices in Europe in general, but also make the European electricity market function in order to avoid great disparities of electricity price within the European Union.
Michael Bröcker: You also promised to cut down bureaucratic obligations by 35%. Is that realistic?
Kyriakos Mitsotakis: That’s a target that the Commission has set, I think it’s 25%, not 35%, if I’m not mistaken. But it is very clear that we’re adding regulation without really thinking about the consequences of those regulations on the cost structure of our businesses. We cannot implement the green transition at the expense of our competitors. I think this is now very clear.
Michael Bröcker: The Green New Deal needs a side industrial deal.
Kyriakos Mitsotakis: Exactly, a “Clean Industrial Deal”, and this is exactly what the Commission will be proposing. Of course, we’re also looking at the reforms that Germany will hopefully implement. I’m very happy to see that the agenda that the CDU/CSU alliance is putting forward is very similar to what we have implemented in Greece since we came into power. We’ve cut taxes without jeopardising our fiscal position. We have deregulated, we have digitised the state, and this has resulted in a growth that is significantly higher than the Eurozone average, while at the same time, we’re able to produce primary surpluses and bring down our debt.
So you can actually cut the taxes and create fiscal space through growth. This is exactly what Friedrich Merz is proposing. And I can tell you that in the case of Greece, it worked.
Michael Bröcker: Yeah, we have to talk about the Greek economy, it has been outpacing the euro area since 2021, I think. Public debt declined -sounds like a miracle. Is it a new kind of economic policy you are suggesting, or is it supply-side only?
Kyriakos Mitsotakis: No, it’s not supply-side only. We need to explain that because, of course, we have been successful in reasonably cutting taxes, but we also went after tax evasion. We were ruthless in going after tax evasion, using digital tools. This is giving us the additional fiscal space to invest and to support our welfare state.
So in our case, this policy has been clearly successful because we have to produce primary surpluses to pay down our debt, but we can do so while at the same time maintaining growth rates that are significantly higher than the Eurozone average, bringing down unemployment and increasing wages. Because at the end of the day, it is important for the macroeconomic process to trickle down to the real economy. This is beginning to happen as we speak.
But of course, we also need structural reforms: labour market reforms, skills reforms, justice reforms, digitization, which has been a tremendous success in Greece since we took over, reducing the bureaucracy that is related to the interaction between citizens and businesses and the state. All these together have created an environment that fosters and attracts investment. If you add to that mix the RRF, which has been a great success in Greece, I think it gives us an opportunity to bridge the investment gap that has always separated Greece from the Eurozone average.
The next “Greek story” is more about the microeconomy and not the macroeconomy. It’s about attracting investment, boosting our competitiveness, boosting our exports, and focusing on those sectors where Greece can really be a European champion.
Michael Bröcker: The Draghi report is a sharp warning for the European Union, actually for the less a lack of dynamics. Still, US and China are funding billions of dollars into their industry. Don’t we need more money for European companies? Where does it come from?
Kyriakos Mitsotakis: Absolutely. This is going to be the next discussion that we will have at the level of the MFF. We cannot hope to achieve all the goals we have set without the financial means to do so. Part of the money will come from private capital, and that is why we need Capital Markets Union yesterday, because our capital markets are simply not competitive compared to those of the United States. But part of it will also be public money.
The RRF has been a great success. We need to look at what we’ve done and think about the next day. Defence, which is a great priority for all of us. There is no way we can fund our increased defence expenditures simply from national budgets. We may need a small -compared to the RRF- focused European defence fund, funded by joint European borrowing.
Michael Bröcker: With new, fresh money from the Member States?
Kyriakos Mitsotakis: With fresh money borrowed at the European level. SO, an RRF type…
Michael Bröcker: Like what we had in Germany on the European side.
Kyriakos Mitsotakis: Yeah, what we did with the RRF at a smaller scale, of course, but exclusively for defence and for projects…
Michael Bröcker: How big should that be?
Kyriakos Mitsotakis: I don’t know. I mean, even if it were 100 billion, the RRF is 750 billion, it would send a clear signal that we mean business. If that fund is focused on…
Michael Bröcker: Would that be a proposal for Donald Trump to say, okay, we are really willing and able to spend more?
Kyriakos Mitsotakis: I have submitted this proposal together with Donald Tusk in a letter that I’ve sent to all of my colleagues. We need to do two things: we need to spend more at the national level -that, we will not escape. Greece is already spending more than 3% of its GDP on defence. We need to spend more both on the national level and on the European level, because at the end of the day, it’s our security that is threatened.
Asked whether he agreed with an earlier statement by Polish Foreign Minister Radosław Sikorski that he feared Germany’s weakness more than its power, the Prime Minister replied:
Kyriakos Mitsotakis: We cannot envision significant progress in the European Union and strengthening the European economy without a competitive Germany. So Germany needs to get its act together. There are structural issues related to the German economy, they’ve been well discussed in the German public debate. I think this is a time for bold action and more radical reforms. I’m convinced that from the discussions that I had, that Friedrich Merz has this agenda and knows exactly what the German economy needs.
Asked about the impression he has formed from his contacts with Friedrich Merz, Kyriakos Mitsotakis noted:
Kyriakos Mitsotakis: I’ve known him for years now. I did not know him when he was not in politics. Again, it is not my job -I want to be very clear- to tell the German people who they should vote for. But it is my job as an EPP leader to support the EPP candidate for Chancellor of Germany and to share to the best of my ability with your audience my experience and why what I think he wants to do in Germany is, in a sense, in my belief, the right policies for Germany. But again, I don’t intend to interfere in the German election and who am I for Germans to listen to what I have to offer. But to the extent that you ask me, I am offering you an answer.
Michael Bröcker: Greece has been the “problem child” in Europe 15 years ago. Now it’s like a come-back story, and everybody looks to your country. How does it make you feel, and how do you see the reactions of other leaders in Europe when they talk to you?
Kyriakos Mitsotakis: First of all, it makes me feel good on behalf of my people.
Michael Bröcker: Are they more resilient than others? Is there some better maybe? What is it?
Kyriakos Mitsotakis: I think the Greek people have proven incredibly resilient.
Michael Bröcker: Obviously.
Kyriakos Mitsotakis: But I think they’ve also proven that when they have to make a choice, come election time, they will disregard the populist’s promises and reward a competent government. Because they did it in 2019, of course, after the experience with a radical leftist populist, which, by the way, we should remind your audience, teamed up with the extreme right at the time. It was a radical left and the hard right that was governing Greece during the very difficult period of 2015 – 2019. They elected us at the time to propose a different path forward, and they re-elected us with a stronger mandate in 2023.
There is still a lot of unfinished business. The job is not done. There are still issues, significant issues in Greece. We still need to catch up with the rest of Europe, especially when it comes to our GDP per capita. But I think we’re moving in the right direction.
Michael Bröcker: Still, four, at least five countries are governed by right populists, right wing populists in Europe. What’s your recipe against these people, against this movement?
Kyriakos Mitsotakis: In my mind, this is very clear. If people vote for populist parties, they express a reasonable discontent. It could be an economic discontent, inflation…
Michael Bröcker: It could be identity…
Kyriakos Mitsotakis: There are identity issues. And these issues need to be respected. We need to listen to those people. We shouldn’t just disregard their concerns, because their concerns are usually legitimate. The answer is not legitimate. So voting for a populist party has not provided a solution to the problems that people have, and this has been universally attested.
In Greece, certainly, that was the case. People were angry with the establishment parties in 2015. They brought in the radical left with a hard right and what was the result? A third programme. More pain, more suffering. The only way to convince those people is to propose an alternative that will focus on results, that at the end of the day make their lives better, but also take into consideration their reasonable concerns.
Migration is a real issue for people that needs to be addressed. We were able to address migration in Greece. That is why migration doesn’t rank in the top five issues that people tell us that they are concerned with. It takes a careful balance.
In Greece, we’ve been very responsible, this is what I call “responsible patriotism”, when it comes to issues of foreign policy and migration, strengthening our defence. We’ve been socially progressive when we thought that this was necessary, and we were economically liberal. The third was probably the most important one because that’s what generates the growth, that’s what brings down unemployment, and that’s what brings up wages at the end of the day. In our case, this sort of triangulation has worked.
Michael Bröcker: Thank you very much for your thoughts in this interview. Thank you, Prime Minister.
Kyriakos Mitsotakis: Thank you.
