Prime Minister Kyriakos Mitsotakis participated in a conversation with Clare Woodman, Head of Morgan Stanley for Europe, Middle East, and Africa (EMEA), Latin America and Canada, and CEO of Morgan Stanley & Co. International, in the context of the Greek Investment Conference, co-organized by Morgan Stanley and the Athens Stock Exchange in London. The Prime Minister’s remarks are as follows:
In his introductory remarks, referring to the government’s key policy objectives and modernization agenda, the Prime Minister stated:
Thank you very much for having me. This conference seems to have become an annual institutional event, and I’m happy that I see so many leading Greek companies participating. I think it is also an indication of the fact that the Greek economy is more diversified than many people appreciate, with many companies that are extremely competitive, very extrovert, focused on innovation, and looking to capture new markets, because I think this theme is going to reemerge in our discussion.
I think, in terms of the big picture, this year was a year where we truly delivered on our main targets. The fundamental premise upon which the success of the Greek economy has been based has always been the combination of, I would call it, ruthless fiscal stability with a pro growth-oriented agenda. And of course, the two are completely interconnected. The more we deliver, consistently deliver, primary surpluses, the more confidence we build when it comes to institutional investors, the more capital flows into Greece, the more we can build upon our growth story.
I think what we have achieved in Greece, which probably justifies your assessment that we will be outperforming most of the markets in 2026 and 2027, goes certainly against the European trend.
At a time when most European governments are struggling to pass austerity budgets, Greece is both delivering on its fiscal commitments by producing significant primary surpluses, but also has the fiscal space to support both families, through tax cuts, but also to continue to promote a pro-growth agenda.
I think it’s this combination of fiscal stability, very rapid reduction of our debt as a percentage of GDP. I consider this to be one of my primary obligations. We should not forget that Greece inherited, as a result of the crisis and in spite of everything that happened with the Greek debt, a massive debt overhang. I cannot sleep with any sense of conscience by not being aware of the fact that we cannot inherit the next generation this significant debt overhang.
When I look at our debt projections, I think we’ve surprised the markets pleasantly, but we’re doing it without implementing austerity. And this is due to the underlying growth potential of the economy, the structural reforms that we’ve implemented, the capital inflows into Greece, the investment-led growth that we are currently supporting.
Because it’s not just about real growth rates, it’s about the composition of the growth. Greece, in the past, also had positive growth numbers, but it was a growth that was fueled by consumption and funded by debt. That’s no longer the case today. So I think qualitatively our growth is different.
And at the end of the day, this is a story of convergence. I looked at the numbers, presented by Eurostat in terms of real net disposable income. I stress ‘net’ because we’ve significantly reduced taxes. We’ve seen an increase, this is after inflation. This is real net disposable income, improved by 22% over the past six years.
So this has to be a story about convergence, getting closer to Europe – and why not overtaking Europe on certain, at least, policy areas. And I think we’re delivering on that agenda. And what I want to assure this conference is that we will remain totally committed to reforms in spite of the fact that we’ve entered our third year of our government.
Usually, there’s a tradition of governments to push on the brake as they get closer to the elections. I don’t intend to do that. I will continue with important structural reforms, many of which will deliver the next growth story after the next elections.
When asked about the key areas Greece should focus on in order to maintain the momentum of its current growth model, the Prime Minister pointed out:
If we acknowledge that the primary focus should be on attracting investment, both domestic and foreign, we need to make it easier for people to invest in Greece. And of course, when we talk about investment, our investment thesis, this is not just about tourism and shipping.
Of course, tourism is critical for Greece, if you look at the number of people who came to Greece, almost 40 million this year, and the net inflows when it comes to tourism. My goal when it comes to tourism is unapologetically ambitious. I want to make Greece the number one tourist destination in the world when it comes to tourism, focusing on high-quality tourism, expanding the tourist season, services around tourism, because one should not forget that when one invests in tourism, there’s a whole local supply chain that supports tourism. Τhis is not just about bringing in people from abroad.
I mean, tourism is a key driver of the economy. But of course, there are many other sectors where we can deliver significant growth from energy to manufacturing. People forget that Greece, and many companies represented here, has a very decent manufacturing base, logistics, infrastructure, services, healthcare, education -we’re opening our education market now to the private sector-, and of course, tech. We can talk a little bit, maybe you ask your questions about technology and AI, because I think we have very ambitious plans.
When you look at what are the underlying tools, we need to focus on further simplifying the business environment. For example, land use regulation, spatial planning, justice, where we’re making significant progress, although it’s a slow moving and long term reform process, digitization, labour market participation. These are the underlying trends that need to be addressed in order to ensure that we will continue to outperform Europe, when it comes to investment.
When we came into power, investment as a percentage of GDP was at 11%, with a European average at 21%. There was a net loss of capital formation in Greece; we’re now at 17%. So we’ve made good progress, but we need to get to 20% or even higher.
This, for me, is an agenda, not just for the next year, but for the next five years. Because for me, looking at the electoral cycle, I have a very clear plan of where we need to go over the next five years. So we need to envision where Greece is going to be in 2030. Or if I want to be more ambitious, where Greece is going to be in 2040.
We’re going to begin very soon a new national dialogue on education. When you think about education, you think about a kid that will enter kindergarten, a four-year-old that will enter kindergarten next year, they will graduate from high school in 2040, in a completely different world.
So I think we’re capable of having these sorts of discussions, and that’s why my horizon goes beyond 2027, because I know that the reforms that we may be implementing now, we will see their impact in terms of growth in some years from now. We need to focus on the short term, but also be very cognizant that we also need to lay the foundations for the medium and long term growth.
When asked how the government will manage to continue making progress in the areas of climate change and energy independence and contribute to European energy security policy during the green transition, the Prime Minister noted:
How much time do we have? Because I could be talking…Τhis is a big topic, and of course, it’s also a topic at the heart of European competitiveness. We’ll talk about this maybe in a bit. Europe cannot be competitive at all unless it has competitive energy prices, especially when it comes to electricity prices that are almost double what they were in 2019. This is not something which is long term sustainable.
But if I look at Greece, six years ago, we took a decision. We will go all in when it comes to renewables. We will move away from lignite, because at the time it was already obvious that it would be too expensive and we need natural gas as a transitional fuel for the foreseeable future.
We’ve delivered on these goals. We produce more than 50% of our electricity from renewables. If I look at just the interest in the pipeline, there’s more interest than we can practically accommodate, but we will reach our renewable targets. But we need to focus on storage, whether it’s batteries or pump storage. We have the geography to accommodate it. So this for us is going to be a big push.
For the first time we’re exploring our own resources. Can we become energy-independent when it comes to natural gas? Who knows? But we have enough indications that it’s worth trying. So we will have the first exploration rig, the first actual drilling after 40 years west of Corfu, in what seems to be a very promising exploration attempt.
And of course, I’m happy that this is not just something which is led by Exxon, we have two Greek companies taking the lead, Energean and HELLENiQ ENERGY, taking the lead in this effort. So maybe there’s going to be significant upside in terms of our energy independence. But we know that in the short to medium term, we will use natural gas for electricity production.
And of course, we are also leveraging our geographic position. We were not part of the energy map of Europe five years ago. We were just somewhere in the periphery. Now, with everything that’s happening and the upheaval in the global energy market, we’re right at the centre of the developments in the Eastern Mediterranean. And this is very important for Greece, geopolitically, the fact that we’re the entry point for American LNG, not just into Greece, but also into the region.
We are a provider of energy security for our northern friends, the Balkan countries, and of course, when you look at Ukraine, the fact that we’re sending gas to Ukraine today is not just economically, but geopolitically very important to Greece. We’ve turned what used to be a disadvantage into an advantage.
And of course, it’s not just LNG. It’s not just looking to American LNG. It’s also looking towards the south. We’re building all the east electricity interconnections to Cyprus, to Egypt, and the new trade routes when it comes to the Middle East and India.
When you look at overall the discussion around energy in Greece and in Europe, I think there’s a general understanding that when it comes to decarbonizing, let’s do the easy part first. Let’s not put an inordinate cost on our businesses, especially those that are hard to abate sectors in terms of decarbonizing, at a time when the technologies are simply not commercially viable.
We cannot just look at the green transition and our climate targets independent from competitiveness and social cohesion. I think this is something which in Europe, at least at the level of the European Council, we have sent very clear directions to the Parliament. We are still ambitious in terms of our climate goals, but we should not forget that we’re 6% of global emissions.
Look at shipping, for example. We are tremendously competitive when it comes to shipping. But at some point, there was an agreement discussed at the level of the IMO that imposed essentially a tax on shipping companies with the prospect of developing some decarbonization solutions way out into the future, when the technology is not at all obvious. So I think this was a wrong approach. We made it very clear. We need to focus on the transition fuels, for example, natural gas.
So let’s bring down the emissions where we can actually do it first and do it in a fast way. So we’re talking about ambitious targets, while there are still many European countries that burn coal for electricity production. So let’s do the -nothing is easy-, but let’s do the obvious stuff first, and let’s ensure that we don’t destroy European industry in the process of chasing climate targets which are simply too ambitious.
When asked about the digital transition in Greece and the policies it is pursuing in the field of innovation, Kyriakos Mitsotakis stressed:
First of all, let me point out that for Greece, the digital transition has proven to be a tremendous opportunity. I would argue that maybe this is a space where the state is actually maybe even ahead of private enterprises. If you look at what we’ve achieved in terms of digitising the interaction between the government, businesses and citizens, I think it has been transformational. Our gov.gr initiative has proven to be tremendously successful, to the point that gov.gr is the second most popular brand in Greece, private or public sector. I think this tells us something about how people embrace technology if it really makes their lives easier.
Of course, it’s a productivity enhancement. You look at how much time, especially a medium-sized enterprise has lost in terms of dealing with the state. It is really improving our productivity to be able to do that. This is a ‘1.0 transformation’.
The ‘2.0’ is how do you add AI enablers in terms of improving the productivity of the public sector. We’re really working hard on this topic, working with some of the top tech companies, but also how you develop a tech ecosystem in Greece that develops primarily AI applications.
But most importantly, how do we convince, and this is already happening, all the big companies that are part of this discussion to use AI and technology to improve their own productivity, hopefully by reaching out to Greek companies first rather than just importing tools.
And of course, when it comes to the infrastructure, we’re building lots of data centres in Greece, because we can cover the energy supply. But this is not just about infrastructure and data sovereignty. It is about, in my mind, developing smart applications, both at the government and at the private sector level, that will improve productivity.
And when it comes to the business of government, there, I really think that we have an opportunity to leap frog many other governments. Not many governments have what we have in Greece now. If you look at, for example, I don’t want to use the UK example, but look at countries such as Germany. Germany is still an analogue country in many ways.
What we have in Greece, I don’t think has been recognised enough in terms of how important it is and how much we can build upon these foundations to launch the next ‘productivity revolution’ when it comes to the public sector. If you look at problems, big reforms, for example, land usage, issuing building permits. We’re implementing a big structural change. I mean, these are issues which technology will help us to address, even issues which come from the past.
We have big issues now in Greece in terms of our agricultural subsidies. But this is essentially a problem of merging databases and cross-referencing information that already exists. It’s a painful transition right now, but in a year from now, we will be able to ensure that whoever is entitled to an agricultural subsidy will get the amount that they’re entitled to. And because we’re cutting out fat and corruption from the system, the true farmers will receive more money because the pot is the same. So this is an example of a reform that may be painful in the short term, but in the medium to long term, it’s the right thing to do.
So I’m a big believer in technology as an enabler and there are many examples of how we can make our life easier and how we can be very innovative in terms of how we use technology to also deliver better public services.
When asked about Greece’s role in European initiatives to strengthen global security, the Prime Minister said:
I think that Greece has regained its credibility in Europe, and this allows us to punch above our weight. We now have a candidate for the President of the Eurogroup. He’ll be joining you tomorrow. There are two candidates, a Belgian and a Greek. I don’t know what’s going to happen, but the fact that Greece, 10 years after the fiscal crisis, is credibly able to actually compete for the presidency of the Eurogroup, I think, is indicative of the progress that we have made and of the fact that we aspire to play a role in European affairs.
We’ve been able to do it in the past during difficult times. For example, I remember COVID and the vaccination certificates. We were at the forefront of opening up tourism during COVID. So we’ve actually demonstrated that we can contribute to the European debate. And certainly this is a role I aspire Greece to play.
And when you look at Europe, now, we have specific priorities on the agenda. The Draghi report says it all. But, at the end of the day, have we made enough progress? The answer is no. Energy, interconnections, creating a true European energy market to bring down the price of energy for everyone. Savings and Investment Union, what we used to call capital markets union. We are delivering on that front. The Athens Stock Exchange is now part of Euronext, so we are open to be part of bigger projects. There are projects, there are foreign banks taking stakes in Greek banks. We believe in this broader European story.
Simplification. I was reading an article yesterday in the FT about the cost of submitting an application to the Innovation Fund. It’s absurd. We’ve created a European bureaucracy that is stifling innovation and just adds at the end of the day. It’s probably not worthwhile for companies to actually go through all that pain. Single market. The 28th regime, this is something that Letta wrote about. This is so important. Can we create a legal structure that would allow our startups to do business in all European countries?
So these are four thematics. And I’m not talking about the geopolitics and about defence, where I aspire Greece to actually play a role and to contribute to the debate.
And I would also argue that we’re in a different situation. We spoke a lot about the success of our economy. It is directly correlated to political stability. If you look at the European countries, now there are countries which are in a mess because the politics don’t work. The politics in Greece do work, and they will continue to work. And I’m convinced about that even after the 2027 elections, because at the end of the day, people are very much aware that they need a stable government to deliver safety and prosperity. Right now, I’m afraid that New Democracy is the only game in town when it comes to have a credible proposal on how to govern the country and take it forward.
That’s why I’m also very optimistic about the 2027 elections. And of course, I would point out again in this audience that the elections will take place in the spring of 2027. I’ve attended this conference numerous times, and I do remember the scepticism when I first came before the 2023 elections. At the time, the one question is, will we have an absolute majority? I said, yes. Many people questioned it, and we delivered. And I remember the polls in April of 2023, indicating that we were at 33% and we got to 41 %. We have a story to tell.
We delivered on our promises. We have a story to tell about the future of the country, the next five years. And that’s why I think this currency of political stability is so important, not just in Greece, but also in Europe. So when we talk in Europe and try to make our case about what’s good for Europe, I think we’re being listened to. And I think we have the capability.
Especially when you sit at the European Council, you wear two hats, you wear your national hat and you wear your European hat. I’m fully aware of the fact that, of course, my national priorities are important. But if Europe doesn’t do well, we’re not going to do well. If, I don’t know, the big European markets enter into a recession, what will this mean for our tourism? So we’re not an island of growth in a sea of turbulence. We need to ensure that Europe also does well in order for us to do even better.
When asked about the government’s social policy, the Prime Minister noted:
I think we’re at the time when all incumbents are under pressure, some more so than others. But it’s also true for us. Cost of living is a real problem. One needs to acknowledge it openly. It’s all good to talk about the macroeconomic performance, but people need to feel it in their pocketbook.
My number one priority is to ensure that the macroeconomic success is translated into people doing better on a personal level. What does this mean? Support of disposable income means better wages. It means also for the companies that are part of this group to understand that as the economy is doing better, they need to share the prosperity of their company with their employees. We’ve seen increases in nominal wages, but we can do better.
And of course, we are returning €1.7 billion in tax cuts. If you’re a young person today in Greece under 25, you will pay zero income tax, zero. So this is particularly important at a time when we want to direct more young kids towards technical education, vocational training. That’s where the skills we need. If you talk to the companies, where do they need skills? That’s where they need. I want these companies to actually train them.
If you enter the job market at 22, for example, or 20, for five years, you will not pay income tax. And between 25 and 30, you will pay 9% instead of 22%. For families with children, bigger tax credit, depending on the number of children you have. So people will see that in their paycheck come January. And this is important because this is a real concern to people.
I think the biggest mistake that we can make is be arrogant about our overall economic performance without recognising that this needs to translate to better real wages, but also better public services.
We made big improvements in healthcare, and I’m happy about that. There is a transformation taking place in our National Health System. People are beginning to recognise it. Look at, for example, the future of healthcare and the cost. We are at the forefront in terms of preventive screening examinations in Greece. This is the future of healthcare.
So people need to understand that we care about them. We may not always be able to solve all their problems, nobody is, but we care and we try. These are two important words that need to be at the forefront.
Because it’s very dangerous for us to come to these beautiful investor conferences, get the applause that I think to a certain point we deserve, but recognising that we’re politicians and we’re here to improve people’s lives.
And of course, we all have a role to play, companies, in terms of offering better wages and more benefits. I’m happy about the fact that we have a collective bargaining agreement in Greece. For the first time, trade unions, employers and employees sat down and said: “We can actually get to a point where we need more collective bargaining in Greece”. This is good for both sides, I mean, everyone, banks, in terms of providing more credit to the real economy, more mortgages. We still don’t have enough mortgages in Greece.
So we need to understand that we need a new social contract, although I don’t like the term because it’s been overused, and that essentially everyone needs to understand that they have skin in the game, that they have something to look forward to. If the country does well, this is not just a story about a few people, it’s a story about the majority of Greeks needing to benefit from this new shared prosperity.
