Prime Minister Kyriakos Mitsotakis participated in a conversation with the President of the European Parliament Roberta Metsola, in the context of The Economist’s 30th Annual Government Roundtable, held at the Grand Resort Lagonissi. The discussion was moderated by Daniel Franklin, Executive editor and Senior editor of The Economist. The Prime Minister’s remarks follow:
In his opening remarks, referring to the results of the NATO Summit in Ankara, the Prime Minister noted:
Well, first of all, let’s distinguish between the public remarks that were made before the Summit and after the Summit, and what actually happened during the Summit itself. And I think the Summit itself was quite successful because it reconfirmed the important decisions that were taken last year.
The most important decision taken last year was the necessity of Europe and the European members of NATO to really step up in terms of taking real ownership over our own security. We set ambitious targets in terms of defense spending with a horizon to reach a cumulative 5% defense spending by 2035. That’s 3.5% core defense spending and 1.5% defense-related spending. And most European countries have made significant progress towards that end.
Greece has already met the 2025 targets as of 2026. And this puts us in a sort of an elite club of only 5 NATO members who have already achieved that goal. So we’ve been very consistent in terms of meeting our NATO obligations. But it is very encouraging to see that other European countries are also stepping up.
And of course, this discussion is also connected to the overall debate surrounding the European defense initiatives and the need for the European Union to take more ownership when it comes to defense-related issues.There’s a discussion related to this concept of European strategic autonomy, developing our defense industry, supporting the numerous startups that are beginning to emerge across Europe to offer innovative and cost-effective solutions to real battleground problems.
So I’d say, all in all, it was a successful Summit. There’s always some drama and some excitement involved when the American President makes on-the-record remarks, but all good at the end.
When asked about a potential sale of F-35s to Turkey, Kyriakos Mitsotakis pointed out:
I don’t think we do justice to the importance of the decisions taken at the Summit when we just limit the public debate in Greece around the issues related to the Greek-Turkish relationship. When we have issues to discuss with Turkey, we’ve discussed them amongst ourselves. And sometimes in Greece I think we take a very narrow-minded approach when it comes to these broader issues.
Again, the important message coming out of the Summit is related to the fact that Europe is spending more on defense, and that is the only way to also convince the United States and the U.S. President that we take our defense seriously.
So I’m not going to make any further comments regarding this topic. I spoke about it briefly yesterday, but I’m always sort of surprised by how part of the Greek media reports on these issues, with a great degree of exaggeration and an inability to really understand the complex dynamics that we face. So let’s leave it at that. I don’t have anything further to add on this topic.
In response to a question about Europe’s position in the world, given the growing power of the United States and China, the Prime Minister stated:
I think over the past years, and as a result of the war in Ukraine, but also because of some important reports that were written, and I’m referring to the Draghi and the Letta reports, there has been a sense of almost a brutal awakening at the level of European Council when it comes to Europe’s role in this changing geopolitical and geoeconomic landscape, and it is no surprise that the priorities laid out by the Commission, by the Council, but also by the Parliament focus around these two critical issues: competitiveness on the one hand, security and defense on the other.
All the initiatives that we take are moving in that direction. Unless we fix the competitiveness imbalance with the US and with China, Europe is going to continue to decline. Important decisions have to be taken in that direction.
If you look at the speed at which we have implemented the recommendations of the Draghi report, it’s probably not what we would like, but I think Roberta was very correct to point out that Europe is a very complex institutional construction, which involves lots of compromise. It has three pillars: the Commission, the Council, the Parliament, and they all at some point need to agree when it comes to the important decisions, and this, of course, does take time.
Having said that, the issues are addressed with a new sense of urgency. When we talk about competitiveness, we have to look at the single market and the way it functions, all the problems that it still has. Roberta referred, and rightly so, to the cost of living crisis, which is something that affects all our citizens. If you look at the single market now, it is difficult for me to explain why the same product costs more in Greece than it costs in another European country, even if you account for the cost of transport.
So, there are still basic things that need to be fixed within the single market. This notion of the 28th regime, the ability of a start-up to be able to be created, for example, in Greece but be registered in Poland or Lithuania, and be able to do business there. All these are important ideas that need to become law and need to be implemented.
And of course, the difficulty is always to ensure that these bold suggestions are not watered down in the process and not overcome by European bureaucracy or by the necessity to achieve compromises at the level of the European Parliament.
When we talk about energy, we are simply not competitive when it comes to energy prices in Europe, and there are still significant discrepancies between the prices of energy across different European countries. So, we don’t actually have a single market of energy.
Yes, we’re looking at the grids package, improved connectivity, but all of this needs to move at a much faster speed.
And finally, when it comes to trade, I am a proponent of free trade agreements and at a time when there is more geopolitical tension around trade, it is to the interest of Europe to complete these free trade deals with. You mentioned Mexico; India is an incredibly important market.
And, of course, I speak also as a country which is a global leader in shipping, and shipping is the lifeline for international trade. So I have an additional interest when it comes to these initiatives.
And finally, when you look at China, important decisions need to be taken when it comes to the survival of our manufacturing base in Europe. I’m not in favor of protectionism per se. And many of the problems of European competitiveness are not related to China, but one cannot ignore the fact that China currently accounts for 30% of the world’s manufacturing capability and 19% of the world’s economy.
So we cannot afford, especially for critical sectors where we retain a competitive advantage, to be flooded by Chinese goods that will eventually result in hundreds of thousands or millions of jobs being lost in Europe.
Responding to a follow-up question about the measures needed to protect European industries, the Prime Minister said:
You will need to do both… For example, if you give your car industry – I’m slightly agnostic when it comes to the car industry because we are not part of the European supply chain. But the question is, okay, if I do protect, for some time, my car industry, will I give enough incentives to the European car industry to innovate and to reach the level of sophistication that the Chinese cars currently have?
Because this is no longer a question of price. We need to understand that the combination of AI and robotics in China is creating a manufacturing powerhouse which is much more sophisticated than we understand. So if we take protective measures, we need to ensure that we also look at the other side of the ledger. Make our industry more competitive, address issues of bureaucracy, pass the omnibus laws that make doing business in Europe easier, because protection by itself is not going to do the trick.
Regarding the role Europe might play in the field of artificial intelligence – whether it can be a creator or simply a consumer of AI – Kyriakos Mitsotakis pointed out:
If you look at capital expenditures on AI infrastructure, what we call the “AI stack”, it is clear that Europe is significantly lagging behind the US and China. At the same time, there is a very vibrant debate about the concept of AI sovereignty. Where do we keep our sensitive data? And what is the necessity to invest in Europe to ensure that at least when it comes to where the data actually is, that we are not dependent on the United States -because China would clearly not be an option.
At the end of the day, as much as we offer in terms of public money, European money, or national money, the bulk of the funding when it comes to these investments is private capital, which brings us again to the question of the ability to mobilize these sums at the European level, which is again connected to the topic of the Savings and Investments Union. Why is it that our savings are being directed to the U.S. only to possibly be reinvested in Europe through the U.S.?
So we need a much greater mobilization of private capital to at least be able to compete when it comes to the infrastructure of AI. For example, the European Union is now going to finance a certain number of what we call “AI gigafactories”, “giga projects”. And we hope that Greece can also play a role in this development.
And for a country the size of Greece, we probably would be aiming for one flagship, big project. We already have our new supercomputer which as we speak is in the process of being installed close to here, at Lavrio, and this computing power is critical in order to offer the government but also the start-ups computing capability to develop at least the necessary AI applications.
So, right now the jury is still out, whether Europe is going to be able to play ball when it comes to the LLMs of this world. But we certainly need to be able to be active in the application layer, which is at the end of the day the tools that will develop the solutions to improve our productivity.
There I see a lot of dynamism when I look at Greece, I see lots of interesting start-ups that are developing products and services in this space. But each country will also need its own national strategy, and we need to ensure that when it comes to regulation, we need to be smart and flexible.
Because when I hear some of the big U.S. companies telling us: “we are not going to offer some of our products to Europe as a whole because we are restricted by European regulation”, I raise the question of whether we have taken some of our regulation maybe a step too far. When it came to data protection, we set the standards. When it comes to the AI Act, we were again ahead of the curve. But I think there are issues which need to be addressed, because I wouldn’t want to be in a position not to have access to cutting-edge know-how simply because for some reason we have made it a regulatory nightmare for these companies to operate in Europe.
When asked about the possibility of strengthening cooperation with European countries that are not EU members, including in the defense sector, the Prime Minister underlined:
On the question of various types of cooperation, this, to a certain extent, already exists within the European Union. Not all countries are members of Schengen. Not all countries are members of the Eurozone. So there is already a degree of variable geometry. And the treaties and the way the European Union works is able to accommodate for specific priorities of member states.
Defense is going to be an interesting test, whether we will be able to develop a core group of countries that could do more when it comes to European defense collaboration. SAFE, to a certain extent…
In response to a follow-up question about whether the United Kingdom could participate in the European defense program SAFE, Kyriakos Mitsotakis said:
We first have to make it work for the European Union. And if you’re talking about sort of a “coalition of the willing”, when it comes to EU countries, we first need to be able to formalize that. And to a certain extent, it is happening at hoc level. So you have bilateral, trilateral cooperation.
This leads to the standardization of procurement. For example, when we buy a French frigate, which we have, we essentially went to the French and said, “we basically want the same ship that you are building with minimum sort of changes to the basic design”. This is creating economies of scale. The Swedes may come and also buy the same ships. This creates more countries that are actually using the same platform.
So you’re starting to see various sort of circles of countries able to cooperate when it comes to defense, and SAFE is also a program that is encouraging procurement across member states.
Now, whether the UK could be a member of such an initiative, difficult to tell. There were ways for the UK to join SAFE, but it didn’t work out at the end because, of course, there are certain prerequisites that have to be met.
Referring to the issue of EU enlargement and the accession of the Western Balkans, Kyriakos Mitsotakis noted:
And back to the question of enlargement, of course Greece, as a country belonging to the region of Southeast Europe, has a great interest in seeing our Western Balkan neighbors progress towards the European Union. And the truth is that we have repeatedly delivered promises that have not been kept, also, to a certain extent, because these countries were not able to progress at the speed which was required according to the very rigorous European accession process.
It is encouraging that Montenegro could become the 28th – I don’t want to add insult to injury – but could replace the UK as the 28th EU member. This is a distinct possibility. It could happen within the next 2 years, and it would send a signal to the Western Balkans that this is actually not a pipe dream, this is something that can happen.
But having said that, every single country is treated on its own right. There are important issues which need to be addressed, and we are here to support our Western Balkan friends in this difficult journey. But if we were to have progress on even one country that would send a signal.
Having said that, I need to point out that we need to make progress on Serbia, because we have not been able to open a single chapter when it comes to Serbia for 4 years.
At some point it’s easy to play the blame game – “it’s your fault, it’s our fault”- but Serbia is 50% of the GDP of the Western Balkans, and one could not envision the Western Balkans being stable and European without a European Serbia.
Maybe we need there to convince some of our friends at the Council to take a small leap of faith, because we also need to send a signal to Serbia that we are actually interested in bringing them on the right track.
In response to a question about the issue of migration and the reduction in migration flows to Greece, the Prime Minister stated:
Migration does not rank in the top of the ten issues that concern Greek society today.
It’s a big change, but I’ll tell you why. Because when we came into power in 2019, we had 30,000 people on the island of Lesbos, illegal migrants, refugees. You know how many we have now? 300. And instead of having migrants and refugees on the islands of the Eastern Αegean, we have thousands of Turkish visitors who come with a fast-track visa to visit the islands.
We’ve been able to manage the problem by working with Turkey, but also by sending a very, very clear signal since the very beginning of our first term that we would protect our external borders.
We were faced with a hybrid attack back in March 2020. And I was the first at the time to bring the leadership of the European Union to the land border with Turkey to send a very clear signal, that unless we highlight the external dimension of migration, the problem will not be solved, because the discussion in Europe only related to secondary flows, and it was a zero-sum game.
We could never solve this problem unless we addressed the fact that we had too many people coming into Europe in the first place. So we were unapologetic. We said to the smugglers and to the possible desperate people who were willing, however, to pay big sums of money to the smugglers, that we will make it very difficult for you to enter Europe. And of course, now that the pact is completed, if you’re not entitled asylum, so if you’re an economic migrant, we will send you back. And now we have the tools to actually do so.
So we were, I think, at the forefront of changing the European debate and moving the European Council towards a much more pragmatic direction, which was also adopted by the Parliament. And that is why we now have a pact that has to be implemented. And it’s interesting.
Returns do work because they send a very clear signal to the possible clients of the smugglers that there’s a good chance that you will pay 5,000 or 10,000 dollars or euros and you will be sent back. So when we started sending back people to Egypt, and we’re not talking about huge numbers, the symbolism was very important. Suddenly we saw significant reduction in the number of Egyptians coming through Libya.
And of course, Roberta is right, we have to work with third countries. We’re working, for example, with eastern Libya to help them with their coast guard, offering them assets, because we don’t want these people to be at sea in the first place, because it’s a very dangerous trip. Thousands of people have been lost. My coast guard has saved tens of thousands of people at sea. But we don’t want them to leave the coast in the first place.
I do think that we have contributed towards reframing the debate in Europe and overall, when you look at the way we have handled migration, it has been a successful policy.
And having said that, for those people who are entitled asylum status, we’re happy to welcome them. They can come, they can stay in Greece, we have enough jobs.
We have Sudanese people working now in the fields in central Greece where we have a need for labor. And of course, we also want to conclude labor mobility agreements with countries with which we feel we have a good relationship. Because we want these people to come legally. We want them to come legally, we want them to come on a plane rather than on a dinghy, we want them to be insured, and we want them to contribute to the growth of the economy, but in a legal way.
When asked about the timing of the parliamentary elections in Greece and the challenges facing European democracies, Kyriakos Mitsotakis stated:
As you know, we have just entered our 8th year in power. We will have an election in 2027, in the spring. I’m sick and tired of repeating this. I’m being asked all the time whether we will have an early election, but the election will take place at the end of our term.
And of course, I think Roberta framed it correctly. I think citizens are realistic, but they’re also concerned at the same time. We have major changes happening in their lives: climate change, AI, geopolitical sort of realignment, a younger generation that does not know whether their education is going to guarantee them a job, a younger generation is looking for the basic right to actually own a house, which was a given for our generation. These are real challenges that need to be addressed.
And I would say that the first sort of guideline would be to be humble, to address these concerns with humility, and not to promise the moon. People are realistic. They understand that we cannot make dramatic changes. And that is why I think they’re also quite skeptical when they hear, you know, parties, populist parties from the right and the left promising solutions which clearly are unrealistic in terms of their fiscal consequences.
It’s very easy to throw money at the problem, but the money is not there. And the countries that have tried it in the past, including my own, ended up almost going bankrupt. And we will not repeat the same mistake.
So it is the responsibility of the responsible parties to ensure that whatever we propose is supported by the financial means to actually implement these policies. And this is exactly what we will do. The temptation is always great to overpromise, but in two consecutive elections we won an absolute majority by not overpromising.
And when I look at what we have delivered in our fourth year compared to what we promised we would do in 2023, we are more or less on target. You know, we promised that we would further reduce unemployment. We did so. We promised that we would increase wages. We did so. We’ve increased the minimum wage by 42% over 9 years.
We promised sort of record foreign direct investment. We’ve delivered. We’ve promised to strengthen our Armed Forces, but we have delivered. We’ve promised to protect workers, and we have actually delivered. We said we would digitize the state. We’ve done so.
Of course, the elephant in the room is the affordability crisis. But you’re not going to solve this crisis by simply sort of claiming that you can basically write blank checks and send them to people and commit to measures which clearly cannot be funded.
And one final point on the elections, which concerns both of us: the integrity of our elections is going to be challenged by AI. It’s a reality.
The capabilities of AI are just staggering in terms of creating fake videos, audios, whatever you can imagine. We desperately need to address this and if there is one regulatory battle I would like to have with the tech companies, is to ensure that we have some sort of watermarking technique to identify when a video is a product of AI. This is going to be absolutely critical.
We have enough nasty people within our countries, but also outside the countries, that would like to play havoc with our electoral process. It’s an issue we’ve discussed. I’ve raised it repeatedly at the European Council. I don’t think there will be time to do much before the next elections, but we should be aware that the next elections will be fought in a completely different digital environment from the previous ones.
When asked to make a prediction for the France vs. Morocco match in the World Cup quarter-finals, the Prime Minister replied:
I’ve placed my bets on France, before the World Cup started, so I’ll have to stick with my initial prediction.
