Prime Minister Kyriakos Mitsotakis visited Oxford University, where he participated in a discussion with Ngaire Woods, founding Dean of the Blavatnik School of Government and Professor of Global Economic Governance.
During the event, the creation of a new scholarship for students from Greece was announced, enabling them to attend the Master of Public Policy course, offered by the Blavatnik School of Government.
Here are some highlights from the discussion:
When asked what advice he would give to leaders of countries facing difficult situations, drawing on Greece’s experience of success, the Prime Minister stated:
First of all, I think it is worthwhile understanding in slightly greater detail what really happened in Greece and to Greece during the financial crisis. You’re right to point out that in 2010, the country went essentially bankrupt, had to apply for a first bailout package, and there was a second bailout package. Then in 2015, as we were doing slightly better, we chose to experiment with populism, I’d say way before other countries were faced with this populist upsurge, and this cost us a third programme, and it unnecessarily prolonged the crisis for another four years.
I think when we came into power in 2019, we had a pretty clear idea of what we wanted to do in order to restore fiscal credibility, foster entrepreneurship, address the bureaucracy of the state, and digitise the state.
Of course, as a textbook recipe, these may sound as the obvious suggestions, but actually implementing them, especially at a time when we were hit with the COVID crisis, the migration crisis, the energy crisis, proved to be very difficult.
I think during our first time, we were successful in both addressing these mega crises while at the same time laying the foundations for a fiscally prudent pro-growth policy.
If you look at our numbers, now we are consistently reaching growth numbers which are significantly higher than the eurozone average, but we are also at the same time producing healthy primary surpluses which allow us to bring down our debt.
One of my first commitments to the next generation is that I will bring down our debt as a percentage of GDP, because we cannot inherit this overhang to the next generation. We have been posting numbers which have been pretty impressive when it comes to that respect, the fastest reduction of debt as a percentage of GDP of any OECD country.
At the same time, we have been able, I would say, ‘rewire’ the Greek economy and make it much more extrovert, export-oriented, innovation-driven, while leveraging the country’s comparative advantage. I think it’s this balance between fiscal discipline, regaining the trust of the markets, getting back to investment grade, being treated as a normal country. That was a part of our initial goals. We have achieved these goals. Now the challenge is to ensure that we will continue to grow much faster than the Eurozone average in order to converge with Europe, because we essentially lost ten years.
If I look at students your age in Greece, they really want a better future for themselves, and we can only offer that through growth. Growth creates jobs, it creates better paying jobs. We’ve created 500,000 jobs over the past six years, and we intend to fight to keep unemployment on a downward track. There is no magic recipe, but certainly it does pay off to be very well-prepared and to use your time in a position to charter, especially the first six months of your new government, and to also ensure that you have both the plan but also the human talent to be to staff the operations of a government, which, of course, is not always easy. One should certainly not overpromise in opposition because these promises will come to haunt you once you get elected into power.
When asked about his communication with citizens and how he deals with fake news, offensive posts, or hate messages, Kyriakos Mitsotakis noted:
On a personal level, it’s difficult to make a distinction between, I would say, honest criticism, which you seek, and the attacks that are really visceral and try to destroy you as a character. Because the danger is that you enter into a protective zone, and then you insulate yourself from any criticism. So you have to actually make the distinction. Even if you read a press article or if you see something in the media that you don’t like, make the distinction. Is there a substance behind this? But the temptation is to shut off all criticism, and this is actually quite dangerous.
Of course, when it comes to all these sorts of negative comments, I would never read comments on social media. No matter how tough you think you are, they will always, at some point, affect you. I think it becomes even more bothersome when these attacks implicate your family, your wife or children, because unfortunately, these things do happen.
I do try to insulate ourselves from all sorts of negative comments, but of course, it’s impossible, for example, for your kids not to be aware of what is written. There’s almost a perverse temptation to look for the negative comments, and you have to resist that.
Making the distinction between honest criticism, which is important to make us better, and these hate comments is quite important, because at the end of the day, I’m in my seventh year, and I know that the biggest danger is to find yourself in a ‘glass house’ where you no longer communicate with citizens.
I still take a lot of pleasure from campaigning and being outside the office and just speaking to people and engaging and interacting with them. I learn so many things every time I do that. Of course, there are lots of things that have to be done in the office, but we should not forget that unless we’re in constant touch with what’s really happening out there, we will lose touch of our priorities.
For example, now the number one priority in Greece, not just in Greece, is the cost of living. There are two ways you can look at that, or two ways you can talk about the cost of living. The one thing is to start speaking about the macroeconomic success of the economy and basically beat our drum and say, “Oh, Greece is doing so well, and we’re all happy with the performance”. The moment you say that to people who are faced with a cost of living crisis, they will just switch off completely, no matter how valid your arguments are.
You need to start by telling people, “We understand there is a cost of living crisis”, and then use your economic story to tell them why the macroeconomic performance of the economy or what will be discussed in investor seminars is at the end of the day, relevant to them. Because, for example, in our case, the better the economy does, we create more jobs, but it also allows us to have the fiscal space to further lower taxes, support young people through targeted measures, support families with children.
You need to make a connection between the economy at the macro level and the average household at the micro level. The moment you lose that connection, it will be very difficult to communicate with people.
When asked about the port of Piraeus and the geopolitical challenges posed by Sino-American relations, the Prime Minister pointed out:
First of all, let me point out that the initial investment in the Piraeus port was made in 2008 and even at that time, no one else was interested. Whenever I hear some criticism about this investment, I do point out two arguments. First of all, the Chinese were the only interested parties at the time. Second, we are a government that respects the contracts that we have signed. There’s no question regarding the Port of Piraeus who manages it. We will respect the agreements that the previous governments have signed.
Of course, Greece is a country which belongs to the European Union, has a strategic partnership with the US. Over the past month, we did manage to leverage our geographic position by becoming an energy hub for American liquefied natural gas, not only to cover our own needs, but also to serve the requirements and needs of our Balkan friends. We are actually selling gas that enters the European system through Greece up to Ukraine. So, we use this geographic position to strengthen our geopolitical and economic hand with the US.
But at the same time, we have a multifaceted foreign policy. We understand that at some point, trade-offs have to be made. But for me, the most fundamental premise is that we respect our alliances, but we also respect the agreements that we have signed. So far, I think we’ve been able to navigate this treacherous landscape reasonably successfully.
Of course, for me, the greatest challenge is not so much necessarily to navigate between the US and China. It’s to play a more active role in European politics and to ensure that Europe as a whole is going to be able to navigate between the two superpowers in a way that enhances European competitiveness because we are still, for our trade or for our tourism, very much dependent on Europe.
We cannot be an ‘island’ of high growth in a broader European environment that is suffering from low growth and low productivity. So the solutions that we need to implement at the European level, when it comes to implementing the recommendations of the Draghi report, for example, need to be our number one priority. So we will always try to play our hand by making our voice heard around the European Council and in Europe in general.
And we have regained the credibility to be able to do that. If you tried to do that ten years ago, no one would listen to you. We were in a basket case, essentially. It’s harsh, but it’s true.
It is interesting that ten years after the culmination of the financial crisis – and you should not forget that in July 2015, Greece came very close to crashing out of the Eurozone, which would have been a complete disaster -, so ten years after that crisis, the Greek Minister of Finance is one of the two candidates to lead the Eurogroup, which is essentially the group of ministers of the finance of the Euro. It’s a spectacular change in a sense. The fact that he is on the shortlist as one of the two candidates, is a recognition that Greece is actually being treated as a normal European country by our European counterparts.
I would argue that more Europe would be the solution in order to navigate this complex geopolitical landscape.
Responding to a question about the future of Europe and the challenges that the EU must overcome, Kyriakos Mitsotakis emphasized:
For those of you who study the history of European integration, you’re probably aware that this process was never linear. We had periods where not much was happening, and then periods where a lot was happening in a relatively short time framework.
I’ve been sitting around the table of the European Council since 2019, and I would argue that Europe has made some extremely important decisions since then. I mean the Recovery and Resilience Fund, which was the first time we decided to borrow at the European level to support our economies post-COVIDs, in a sense, set a precedent.
The way we’ve dealt with Ukraine, we were unified in spite of the difficulties. Some member states are still having a different view. The progress we’ve made on defence, the recognition that we need to spend more on defence, and we also need to relax our fiscal rules to allow us to do that. The way we have recalibrated our approach vis-a-vis migration. Greece was at the forefront of the migration crisis, and I was unapologetic in supporting my belief that you cannot have a consistent migration policy if you don’t protect your external borders. We should be the ones regulating who comes into Europe and not the smugglers.
So, Europe has moved in the right direction on numerous fronts. Having said that, there are priorities that have been laid out in the Draghi report, which are critical in order for us to regain our competitiveness. How do we make the single market work? Are we going to progress on what we call the Savings and Investment Union? So, unified capital markets for Europe. What are we going to do with energy? Our energy prices are significantly higher, but they’re also quite diverse. There is a lot of energy inequality within the European Union, so we don’t have a proper energy market. These are some of the priorities which I’m certainly pushing for.
I think there’s a general sense within the European Council that we’ve done enough analysis, and now we need to move to actions. But one should also recognise that the European Union is a very unique institutional arrangement. There are lots of decision-makers. We don’t take decisions by ourselves. The Commission has an important role. The European Parliament has an important role. Finding majorities within the European Parliament is not easy at a time when the populist voices feel very emboldened after their recent successes.
But I would argue that the next five years, the mandate of this Commission is going to be a make or break period for Europe. Because if nothing happens during these five years, then I’m afraid that the pessimists will have won their battles regarding the future of Europe.
