Prime Minister Kyriakos Mitsotakis was interviewed by Emiliya Mychasuk, climate editor of the Financial Times, in the context of the conference “Energy Transition Summit: East Med & Southeast Europe” organised by the “Financial Times” in cooperation with “Kathimerini”.
The whole interview follows:
Emiliya Mychasuk: Τhank you, Prime Minister, for being here. We’re very privileged, of course, to have you. It is a critical time in world affairs, a very pressing time in geopolitics. We’re here to discuss, of course, the energy transition. But I want to start with the most immediate geopolitical issue, and that is the state of the region and by extension the conflict in Iran and Israel. If I may, I know you’ve spoken to various country leaders in recent days, including Prime Minister Netanyahu, I believe. We have a seeming escalation today courtesy of President Trump. What do you think the chances are with that insight that you have to a spillover into regional conflict?
Kyriakos Mitsotakis: Well, of course, we are extremely concerned about the escalation of this conflict. There doesn’t seem to me right now to be a clear off-ramp, although we will continue to insist on two fundamental premises. The first is that Iran cannot obtain nuclear weapons. And the second is that the solution can only be found through a diplomatic arrangement that will ensure and guarantee that this cannot happen.
And of course, we all understand that Europe on its own does not have the necessary leverage to bring the parties to the table. Only the US can actually do that. So I think it’s really up to the US President to decide which path he is going to take. I think we would all hope that we will not see a further escalation which could have significant geopolitical but also economic ramifications, at a time when the first concern of all Western governments is inflation. We are all very concerned about any driver that will push up inflation and that will significantly disrupt the energy markets.
On top of that, Greece, as a leading maritime nation, is also particularly concerned with the safety of the Greek flagged and Greek owned ships. Just to put this in context, at the very beginning of the crisis, Greece had close to 180 ships, Greek flagged and Greek owned, in the broader region of the Persian Gulf. So this is an additional concern to us, but I guess we will all know much more over the next days.
And let me also add that we should not forget about the fact that in Gaza we have a situation which is truly not just problematic, but horrible from a humanitarian point of view. And the fact that we have this conflict now between Israel and Iran should not discourage us from continuously making the point that we need an immediate ceasefire in Gaza and unhindered access by the population of Gaza to significant humanitarian aid that will address the immediate concerns of the population.
Emiliya Mychasuk: And if America was to become involved, you’re a NATO partner, you’re a military partner, would you see Greece becoming drawn in?
Kyriakos Mitsotakis: Greece is not going to participate, of course. I mean, this is not an operation that in any way, shape or form affects Greece. And we have made that very clear. We continue to believe that there is no military solution to this conflict. And if you look at the history of the Middle East, there have been various fantasies about the ability of us to solve, you know, structural problems through military campaigns that didn’t go very well in numerous countries. So we are extremely concerned about the prospect of a future escalation.
At the same time, our obligation is to make sure that our citizens in the broader region are protected. We arranged some evacuations of Greek citizens from Israel very successfully. These are complex operations and I do hope that we don’t need to do more, but we’re ready to address any eventuality.
Emiliya Mychasuk: And you mentioned 180 ships, I think you said, in the Straits of Hormuz.
Kyriakos Mitsotakis: In the broader area of the Persian Gulf.
Emiliya Mychasuk: And are you tracking those ships too?
Kyriakos Mitsotakis: It’s our job to have a pretty good situational awareness. And again, I do need to make a distinction between Greek flagged and Greek owned ships. But I’m looking at the broader sort of envelope of ships that are controlled by Greek ship owners. And of course, I mean, right now we’ve not seen a significant disruption in the energy market. And I hope that this is not the case.
We’ve worked very hard to bring down inflation. But inflation, I shouldn’t use the word inflation, but the cost of living, which is cumulative inflation over two and a half, three years is the number one concern also, for people in Greece. And it’s a problem that of course would only be compounded should the region go up in flames.
Emiliya Mychasuk: It brought us there to the sort of subject of energy interdependence. And we heard about potential interconnectors and gas routes that might evolve in the region with Greece as a hub. But do you see that as potentially problematic, being the other side of the coin of energy autonomy? So where countries like Greece have significant renewable energy sources, they could rely on those?
Kyriakos Mitsotakis: Yeah, well, I guess this brings us into our overall energy strategy. So in line with the topic of today’s discussion, when you look at Greece’s energy mix, go back to 2010, for example, most of our electricity came from coal, lignite to be precise, which is dirty coal, inefficient, dirty, and emits a tonne of CO2. So in 2019 we took the decision that we want to move away from coal as quickly as possible and this has actually materialised. So 5% of our electricity production now is coal and mostly it’s used as backup.
So we’ve seen a significant increase in the penetration of renewables, with more than 50% now. Renewables, there are hours, you know, especially in months of April, May or October, November, if it’s windy and sunny for hours, the system runs on renewables.
And of course we have ambitious targets to increase the penetration of renewables. We’re slightly biased towards solar, so we’d like to see more wind. Offshore wind is a big potential. And of course we also invest heavily in storage, pump storage and try to add batteries to all renewable installations that are being built.
But at the same time we need base load power. And as many countries, we have placed a strategic bet that natural gas is going to supply baseload power for the foreseeable future. We want to see more competition in the market. There are new plants being built which are going to be more efficient, which I think is going to be good for prices in the system.
But, of course, we also see gas as a strategic asset, Greece’s opportunity to become a provider of energy security to our region. So if you look at, for example, a few years ago, Greece was simply importing the gas that it required. Now, 17 billion cubic metres go through Greece, 11 are exported.
So Greece is becoming a hub. And if you just look at the map, the second map, the first one that was put up, was actually the northern in connection, but it makes the very convincing case how using the existing infrastructure -first of all our liquid regasification units in Revithoussa and Alexandroupoli, the TAP pipeline, but also the Trans-Balkan pipeline through reverse flow-, how we can be a provider of energy security to countries up to Ukraine.So there is a corridor here of great geopolitical importance that connects Alexandroupolis, Greece in general, Bulgaria, Romania, Moldova and goes up to Odessa.
This is a corridor which is not just an energy corridor, it could also be a logistics corridor. You could also envision, this is something I discussed when I was in Odessa, a train link, it bypasses the straits. It’s much easier to ship and much quicker to ship goods. It takes 15 hours if you had a seamless rail connection. So this is a corridor that’s important not just for energy. Βut for energy in particular, us sending gas to Ukraine provides Ukraine with energy security, but also opportunities for all those involved in the transport of gas.
We still have some outstanding questions with our Romanian friends because the duties are slightly too high. So we want to be able to offer a bundled product, in terms of pricing, a topic I discussed when I was in Romania. I think we’ll make that work because we want to make sure that the route is competitive.
And of course, Ukraine also has an interest in making sure that from a price point of view, the tariffs are not too high in order to make sure that we can actually use our infrastructure to export gas up to Ukraine. And, of course, Ukraine has, as we heard, significant gas storage facilities. How are they going to be filled to the extent that they’re not going to get any gas from Russia?
Emiliya Mychasuk: And this seems like a fairly medium to long term kind of proposition. Another energy solution that some people are looking at is nuclear energy, which of course is at least a 10, 15 year lead time. Is that something that you think Greece is prepared to consider?
Kyriakos Mitsotakis: I think we should be prepared to join the “nuclear alliance”. And this may come as a shock to some people listening to us, given that Greece is a country that has no background or no experience in nuclear energy. But when I look at the overall energy developments, I see no way for the world to get to carbon neutrality without nuclear. And I see very interesting developments in nuclear technology, especially when it comes to the small modular reactors.
And I just don’t want us not to be part of this discussion. I’m not saying we’re going to do anything next day, but at least I want us to be part of the conversation and to understand where these technologies are going. And by the way, this is also a critical issue for Europe. I’ve been making the case repeatedly at the European Council that we need to place strategic bets in those sectors of clean tech, where we believe that Europe still has a significant comparative advantage. I think nuclear should be one of those. Again, we are not part of the value chain, but there are countries that have experience. So it seems strange to me that a country that is still heavily reliable, a continent that was heavily relying on nuclear technology, is not at the forefront of the new investment in nuclear.
Kyriakos Mitsotakis: And of course we also have the fusion, you know, debate, which long term is the holy grail of research. So we need to be very present. And when I look in those spaces, so when I look at, you know, solving our energy problem, we can talk a little bit about the, how the energy market in Europe found.. I have quite a few things to say about this. One of the strategic bets I think that Europe should place in terms of committing significant resources would be nuclear.
An additional point which I’d like to make, which is a particular interesting, a particular interest to our shipping community. We have to explore whether nuclear is a viable option for shipping, for long haul shipping. And we have, as a leading maritime nation, we at least need to be at the forefront of the research and the debate. It may work, it may not work. It’s going to be 10, 15 years out. But if we really want to think strategically as a maritime nation, we cannot stay away from this debate. And this, of course, is a discussion that I’m very open to have with the shipping community and to ensure that we create a common working group that is going to look at this technology at least as an option.
Kyriakos Mitsotakis: Because when you look at decarbonizing shipping, there is no silver bullet, as you know, there’s no technology right now that seems to stand out, there are interim solutions, but we have to think 10, 15 years into the future. So I don’t think we can stay away from this discussion as a country.
Emiliya Mychasuk: What about hydrogen? You know, you have water, you have, well, actually you have some water shortages at the present, but you have sun.You have, you know, other things…
Kyriakos Mitsotakis: We have a hydrogen strategy, but hydrogen has proven more complex, as you know. I mean, the logistics and the cost of hydrogen has proven more expensive than many people thought. Again, it’s an option. But I would right now in the short term probably focus more resources on storage and on pump storage in particular, because we have the geography to do that. Not too many countries have that and we have quite a few reservoirs already.
As you know we have one big pump storage project in Amfilohia in western Greece that is funded through the RRF and progressing very, very nicely. We have enough, we have dams. Hopefully they will get some more rain in order to make sure that they are filled to capacity. But this is an area where I would place more emphasis.
And by the way, when I look at again, clean tech technologies at the European level, we have to be leaders in storage. Some experiments, as you know, of companies didn’t go very well, but this shouldn’t discourage us in terms of funding, you know, advanced research when it comes to new storage solutions.
Kyriakos Mitsotakis: Are we ever going to be competitive in solar panels in Europe? I have my doubts. So we need to understand within the clean tech space where we can still play a role and where we cannot play because simply the train has left that station. So certainly storage and nuclear, probably offshore wind, these are areas.
And we haven’t yet spoken about interconnections and grids. Maybe we can talk about that, because that brings us into the question of how the energy market, the European energy market, is working or not working.
Emiliya Mychasuk: So tell me how you see that. I mean, grid is a problem in every country in the world, including in China, where they have command control economy and they’re spending 800 billion. I think it is three times the American programme, the IRA, almost deceased, between now and 2030. So how do you see Europe overcoming that when it has its budgetary challenges, a squeeze on defence mechanisms and so on? And, and maybe you want to bring into account the Chinese imports issue?
Kyriakos Mitsotakis: On energy and on interconnections, let me point out that I sent a letter to the President of the Commission, an urgent letter, stating the obvious, first of all, that the prices of energy we have in Europe, across the board, we have a major competitiveness issue. And my second point was that we don’t have a European market for energy.
If you just look at the discrepancies of prices between western and northwestern Europe and eastern and southeastern Europe, we pay much more systematically. It’s a question of interconnections. I fundamentally believe it’s also a question of the minute details of how the algorithm of the Target Model is programmed.
For lack of better word, that would be more explicit. But we are disadvantaged. I would use a stronger word here. And these are the poorer countries of Europe, so this system has been set up to provide cheaper. For some reason, even when electricity can flow between countries, in order for the prices to equalise, it doesn’t happen.
Kyriakos Mitsotakis: So it’s a question of interconnections, but not only. And this is not acceptable. I mean, we’re at the corner of Europe, we’re doing our fair share in terms of moving towards renewables. Why should we pay so much higher prices in a market that at least should aim towards price parity? Because otherwise it’s not a European market. So let’s not talk about the European energy market, because it simply doesn’t exist right now. We have fragmented marketplaces and for me this is a major issue.
It’s good that a working group has been set up. Also, I have enough experience to know that when we set up working groups in Europe, maybe we just want to kick the can down the road. And this is simply, again, for, and it’s not just for us, it’s Romania for Bulgaria for Hungary, this should not be acceptable.
This brings us to the question, how do we look at the energy market as a whole? How do we ensure the common European good? This is what Draghi mentioned in his reports, how we’re going to invest interconnections? For example, we’re tripling our interconnection with Italy. That’s something we agreed with Giorgia Meloni when I was there. It’s good and important. Italy, by the way, is also an outlier, a more expensive outlier in the prices of energy.
Emiliya Mychasuk: I think, Spain also…
Kyriakos Mitsotakis: Spain and Portugal, they’re an “island”. They have low prices for other reasons.
Emiliya Mychasuk: So could they join your push, if you like?
Kyriakos Mitsotakis: I don’t think they would have an interest right now because they have lower prices. If you look at the…..
Emiliya Mychasuk: They have an interest in interconnections.
Kyriakos Mitsotakis: Yeah, but they have an interest, a greater interest in interconnections. And they have the problems between. But they have a different structure. So we need someone to look at the European market and that does not have an interest in specific markets. And that looks at, for example, where are the bottlenecks and make sure -and I don’t have a solution here- we have the financing tools to create those interconnections that would make the market really work seamlessly.
So if we have, for example, lots of wind oversupply in the North Sea in the winter, you will have a lot of sun in the summer in the south. And at the end of the day, this energy needs to flow from where it’s cheaper to where it’s more, where otherwise it will be more expensive and the market needs to equalise at a lower level.
Emiliya Mychasuk: Is it a conversation that’s reaching the top? Is it reaching Ursula von der Leyen? Are you able to have those conversations?
Kyriakos Mitsotakis: Yes, very much so. And I think she understands it and I think we all understand that energy is at the centre of our approach towards competitiveness, connected to the green transition and I’m a fan of the green transition. But we cannot have the green transition while at the same time killing our competitiveness. We spend years speaking about taxonomy and about labelling types of energy as good or bad. We need to be neutral in our approach.
Emiliya Mychasuk: And your position on the Green New Deal?
Kyriakos Mitsotakis: I think adjustments need to be made, especially when it comes to regulatory restriction, regulatory requirements. We account for 6% of the global emissions in Europe. Are we really going, do we really think we’re going to impose our rules on the rest of the world and everyone’s going to adjust and do business with us or are we putting our companies at a position of disadvantage? I think it’s the second, so adjustments need to be made and I think we’re moving in the right direction, especially when it comes to the sustainability directive and the bureaucracy that we place on our companies.
And of course, I mean also issues regarding, for example, shipping. Shipping is a global industry. How are we going to approach this? I mean there’s a global deal right now being discussed at the level of the IMO. What I don’t want is to make European shipping less competitive than other…
Emiliya Mychasuk: Are you a supporter of a shipping tax?
Kyriakos Mitsotakis: I’m not ready to move in that direction yet, because I think we need to look at all options. What I don’t want is, you know, shipowners to just change their flag and move elsewhere because of the regulation. We need a global regulatory framework for shipping because shipping is a global industry.
And again, we need to be cautious that some of the solutions are simply not supported by industry. We don’t have enough green fuels right now and it’s going to take time. So we need to be realistic. Ambitious but realistic. And this is sort of my overall observation regarding how we need to address the Green Deal issues.
Emiliya Mychasuk: You’ve had a lot of success in your time leading the country on economic reform. You have, I think, two years left till the next election. So what are your next priorities in that time? Including the energy transition.
Kyriakos Mitsotakis: We got elected in 2023 with a very clear agenda: build upon our successes, to make sure we continue to have solid public finances and implement structural reforms that will address the underlying competitiveness issues of the Greek economy, notwithstanding the fact that we went through a terrible crisis and that we need to catch up with Europe as quickly as we can. So making sure that we maintain fiscal discipline, recognised by the markets, which it is.
Greece is borrowing around 3 to 5 basis points above France now. Who would have thought this would have been possible even a couple of years ago? And we are producing primary surpluses. These primary surpluses, it’s very easy to be tempted to spend them on subsidies that sort of may be appealing in the short term but not particularly useful in terms of building a long term competitiveness. We have not done that.
For example, when we created the sort of the super surplus in 2024 as a result of a painful structural reform which was going after tax evasion -because I hear a lot of debate, “oh, you haven’t really done any reforms in the second term”, well, that was a very difficult reform, which we did at the very beginning of our term- yes, it did take some time to pay off, but now we see the results.
Half of the money that we saved was spent in public investment. In the past, this would have been given up. And the other half is being spent for income support for pensioners, but also to support people who are on rent because we have a housing crisis and we need to address these priorities. So we always want to see, whatever fiscal initiatives we take, they need to have a growth component to them in terms of attracting investment and making sure that we improve our productivity.
And there are issues to address. Justice reform has been a key tenet of our second term. We’re beginning to see the first results in terms of the speed with which judicial decisions are being made. But these are long term reforms.
So the problem is, you start making the reforms, but you don’t see the results immediately. Now I think we’re beginning to see the results of those reforms that we implemented in the first three years. Improving our health care system has been a great challenge for us. But using European money we are upgrading health centres across the country and emergency rooms in more than 90 hospitals. People are beginning to see that. We’re beginning to deliver drugs at home to people who were standing in line at the local pharmacy to get them.
So a lot of these reforms are becoming more visible. So it’s a question of making sure that we continue this plan and of course, at the end of the day, supporting disposable income.
How do you raise wages? Unemployment has been coming down. Yesterday we were at this incredible event, it was very moving, where we spoke to people who found jobs through job search initiatives undertaken by the Public Employment Agency, but also people who came back from abroad. And for the first time last year, we had more people coming back than people leaving. So we have a huge human talent abroad. And at a time when companies are struggling to find employees, they go to one place, one city, and suddenly you have all these extremely talented people showing up and they recruit like crazy from abroad.
And, of course, we need to give them incentives to do so. For example, for our doctors in the US, 3 months ago I received a letter saying that, “look, we have problems with our accreditation. Simply our field of specialty or subspecialty is not easily recognised in Greece and we go through a huge bureaucracy”. So we passed a piece of legislation. It’s very simple. If you’re accredited by a US board, you’re automatically accredited in Greece. I feel that if the US gives you an accreditation…
Emiliya Mychasuk: Well, it used to be the case at Harvard for you but…
Kyriakos Mitsotakis: Yeah, but now it’s happening automatically and suddenly we’re opening up the door for more people to return.
So you look at the long term structural challenges, the job market, how to make sure we have more participation, female participation, people with disabilities. Productivity, still a huge challenge. Certain sectors are doing well, other sectors are not doing so well. The agricultural sector, huge challenge, but also a huge opportunity. Water management, long term water management. The system we have right now is broken. It’s so fragmented. I mean, we have leakage, no one manages… We need to centralise all this.
So these are some of the initiatives that also would take us hopefully into our third term. So when I look at our term, this is not just seeing out our term and not thinking about what we will do afterwards. I think we’re in a good position. We’re way ahead in the polls. We could win a third term, but we will only do so if a) we convince people that we did what we told them we would do in 23’, and b) if we present them with a credible plan about how we want to take the country forward.
Emiliya Mychasuk: So, as climate editor -I think we’ve still got a bit of time-, I have to ask you a climate related question. Of course, you refer to water shortages and talk about the pressing need for energy and so on. But Greece has also suffered increasing black swan type events. Floods, droughts. Today I think I saw a report in “Kathimerini” saying July is going to be warmer than previous Julys on average. There are fires in Evia. You know, coming from Australia, we have the regular sort of drumbeat as well, but it’s getting louder. What do you think you can, to the extent that you can do anything about that, because Greece is a small country, its emissions by itself aren’t particularly large…
Kyriakos Mitsotakis: And we are leaders in terms of bringing down our emissions, you know, if you look at the 2005 sort of benchmark. So we’re doing our part in terms of reducing emissions.
Emiliya Mychasuk: Yeah, but unfortunately the planet is not respecting these borders. What do you think is necessary in terms of EU funding? You know, as we say, we know it’s a tight time. There are a lot of other demands on the Commission.
Kyriakos Mitsotakis: Well, I think that’s a good question. And when I look at the overall balance between adaptation and mitigation, I think we placed all our chips sort of in the mitigation bucket. But adaptation is still not addressed. We don’t address it yet.
If you ask me, and again, impossible to predict, if in 15, 20 years technology will solve the clean energy problem, I think it will. I don’t know what the solution will be, but the problem is what will happen from now until then. And we have real adaptation requirements that also need to be, you know, supported and funded by the European Union. And this is not a question of simply, you know, going after a natural disaster.
Water management needs to be the number one adaptation priority and we need more funding for water management. It’s critical, it supports everything we do, including our agriculture, and it’s also, you know, an important adaptation initiative.
And of course, in terms of civil protection, I can’t complain because we’ve received, we have a 2 billion programme now to strengthen our civil protection infrastructure. Technology can really help us. We’re looking at, we’re at the forefront of how we can use AI for, you know, predictive modelling when it comes not just to weather, floods, wildfires. I think technology will help us on that front.
Emiliya Mychasuk: Agriculture is a big export industry for you.
Kyriakos Mitsotakis: Yeah, it is a big export and it can do so much more. So if we export as much as we do, and we are a net exporter in agriculture, not many people know that, with our productivity not being very high, think of what we can do if we can also increase our productivity. So there I really want to look at the glass half full.
But the problem is that we have a system, and we’ve had legacy problems, that was exclusively focused on how to manage European subsidies -and we’ve had our problems in terms of, you know, mismanagement of European subsidies. We’re not the only European country that has had these problems-, as if the only job of the Ministry would be to sort of hand out, you know, subsidies. It’s an important component, but we need to think, you know, about the long term and the transition of our agriculture towards products that are competitive and can actually, we can actually gain more, more value. And this is intricately linked to proper water management, but also creating scale, convincing our farmers that they need to cooperate more. We’ve given many incentives.
And we have so many success stories -“Kathimerini” is kind enough to highlight them, you know- across Greece. Great success stories of people doing amazing things in the broader agricultural space.
And of course, last point, because you speak about climate and the environment, and that is environmental protection, protection of our seas. This is critical. We’ve made very bold commitments in terms of, and we will make announcements very soon, two new marine parks, one in the Ionian, one in the southern Aegean, to exceed the 30% threshold of our territorial waters protected, high level of protection that will certainly ban bottom trawling in our most sort of sensitive ecosystem. So this is also an area where I think we can be leaders.
Emiliya Mychasuk: And, oh, we are out of time. But I just wanted to wrap up really, to say if you make a third term and I believe the head of Commission job will come to Greece, is that correct? In 2027 maybe? No?
Kyriakos Mitsotakis: You surprised me. I have no European…
Emiliya Mychasuk: You don’t have ambitions?
Kyriakos Mitsotakis: I have no European ambitions. I’m perfectly happy with what I do and it’s a great honour to be Prime Minister. It’s already, you know, more than a full time job. And right now even 2027, in terms of the next elections, is too far for me to think. You know, usually in politics, if you plan way ahead, you know, events…
I try to get up every day, you know, try to do my job as best as I can and try to stick to our agenda. Twice we got more than 40%. People voted on a specific agenda. And my question to my team is very simple: If in 2027 we go to people in Greece and tell them, “look, this is what we told you that we would do, and we’ve done 80% of it or so, or we’ve delivered our commitments. Are we going to be a successful government? I think yes”. So that’s my priority.
Emiliya Mychasuk: Very good. No, it’s just you have such an interesting and diverse pan-European perspective.
Kyriakos Mitsotakis: But that’s important to the extent that Greece is punching above its weight in European affairs. And this is important. I wear two hats. My first hat is a hat of the Greek Prime Minister. My second hat is a hat of a member of the European Council that has to think about what’s good for Europe because I’m a European. And also what’s good for Europe is good for Greece.
So we have to be aware that when we speak at the European Council, we don’t only represent our country, we do, of course, and our interests. But we also have to think strategically about what’s good for Europe.
Emiliya Mychasuk: I think on that very multilateral cooperative note we can wrap up. Please thank the Prime Minister for being here.
Kyriakos Mitsotakis: Thank you.
Emiliya Mychasuk: Thank you.
