DF
I am Daniel Franklin and I am sitting here with Prime Minister Mitsotakis delighted to be talking with you. It’s been quite a year and a bit since you took office, so perhaps first of all it’s a chance to look back on this rather tumultuous year; what have you learnt in this year in office?
PM
It certainly wasn’t what I expected when I took over. What I did learn is that you have to, occasionally, learn how to handle multiple crises at the same time. Obviously, no one was expecting the COVID adventure, on top of that we had to deal with a migration crisis, a very tense relationship with Turkey and, of course, the economic fallout from COVID. So, the real challenge was, and to a certain extent continues to be, how do you manage the crisis, while at the same time making sure you implement the medium to long term reforms the country so desperately needs? And the two are, in a sense, interconnected. First of all, because of COVID, the urgency to change and to adapt is clearly there. And also because of COVID, we’ve managed at the European level, to make available to Member-States, especially those that cannot afford to increase their debt, substantial sums of money that will actually finance part of this ambitious reform program. So in a sense, in spite of the difficulties, I’m more optimistic now that we can drive through the big changes that the economy so desperately needs and that we have the funds to finance it, because when we spoke before, when you interviewed me as leader of the opposition, you remember we were talking about the big investment gap in Greece, where are we going to find the 100 billion that we need over the next seven to eight years? Well, now a significant chunk of that sum is going to be covered through public funds, European funds, and of course, they will be able to leverage significant private sector capital to be deployed in Greece. So it was, and it continues to be a very hectic period, but I think overall, we’ve managed these multiple crises, I’d say, pretty well. But until the next one, of course.
DF
So it’s sometimes said of COVID, that it is an accelerator of change, so does it in that sense, not just because of the money, does it help you accelerate in some ways the reforms that you already had planned, you were busily working on a reform program, so in a sense, you have the blueprint, but can you do it faster as a result of the crisis?
PM
Very much so, let me just give you a few examples, the Digital State, transformation of the public administration. We have offered so many new digital services during COVID. This was part of our plan, but we had to accelerate everything. And this is, I think, recognized as a big Government success. You cut red tape, you fight corruption, you limit the interaction of people with the Administration, so there’s also a clear public health benefit. And this is something which has, the more you push it, the faster the change, because the pressure is there from public opinion to deliver more and more. And I think we’ve done a pretty good job on that front, but also in terms of pure economic policy measures, which I announced in Thessaloniki, cutting social security contributions for the private sector, the solidarity surcharge, moving away from just supporting unemployed people towards a scheme that will actually subsidize new jobs. And all this was part of our program. But we are very much accelerating these reforms. And we do intend to implement practically everything that I announced in Thessaloniki over the next six months. So it’s going to be a very busy legislative season, not that the previous one wasn’t busy. We passed 105 pieces of legislation during our first year, we amended the Constitution, we elected a new President, first female President of the Republic, so it was busy and it will continue to remain busy. And I do think that also the capital markets, the international investment community will eventually reward those countries that have demonstrated the necessary professionalism in dealing with the crisis.
DF
If you take the Greek economic model, and we’ve been talking about this a little bit during the conference over the past couple of days, there is an over-reliance on tourism, which has been, if you like, brought to the fore because of COVID. So, how do you move away from that? What are the main ways that you move to a different economic model, not that tourism ceases to matter, of course, it’s always going to be important, but less dependence on tourism?
PM
I’d say, tourism is always going to be important, but it’s going to be a different type of tourism. And, in a sense, the whole COVID experience has also demonstrated that you can actually live and work from anywhere, which makes Greece a much more attractive destination, not necessarily for tourists, but for people who actually want to acquire a second home here, and maybe spend not just their summers but also their winters in Greece. We are a safe country with excellent connectivity, it would only get better. We are one of the first countries to auction off the 5G spectrum actually being legislated as we speak in Parliament, but at the same time, there’s also a requirement to move towards a more sustainable model of tourism. The elephant in the room is remains climate change, it’s not just COVID. These are big, international global challenges. And I think COVID in a sense has proven that if we really work hard towards achieving a common goal, look at the progress I expect the global community to make with regards to the vaccine, we can actually address these problems. So, our tourism needs to change we have a very important law regarding spatial planning that will be submitted to Parliament within the next month. How do we foster sustainable tourism while protecting the environment but at the same time, how do we also develop other sectors where we have significant competitive advantages, renewables, logistics, high end agriculture. All these are connected to the main themes, which are also pushed by Europe; the green transformation and the digital transformation. So everything needs to be tied together. And we have a very clear plan in terms of attracting investments in these categories. But there are also the more traditional sectors, for example, we are privatizing our shipyards now, it always didn’t make much sense for me that the nation with the largest shipping footprint shouldn’t at least be able to offer very decent and competitive repair services for our ship owners. So there are traditional sectors, traditional manufacturing, which actually plays an important role in Greek GDP, export oriented manufacturing, where companies will now have the tools but also the capital and the incentives to change their model and become more digital but also much greener in terms of their footprint.
DF
You continue to have something of a brain drain in Greece, how do you address that, because to realize these ambitions you have to draw on the talents of all Greeks.
PM
The measures I announced in Thessaloniki were clearly directed towards the middle class, which suffered tremendously under the previous Government, was overtaxed, and I would almost dare to say underappreciated in terms of its overall contribution to the country. And one of the reasons why people actually left was not just that there were no jobs, it was that the State just asked employers and employees to pay a much bigger contribution than they were willing or able to afford to pay. So, Social Security contributions, critical in terms of reducing the cost of labor, the solidarity surcharge, absolutely critical for good paying jobs, such as the ones that we hope to attract, since we are talking about a peak 10% on top of what you would pay otherwise. So for me, the reversal of the brain drain has to do with the economic incentives. We are addressing those, with a new job creation capacity. I think there are lots of new jobs opening up also in the digital space. In Greece, there are lots of acquisitions of Greek startups by foreign companies, we are suddenly appearing on the global digital landscape because we have very good talent in Greece and of course, talent from abroad that can return but also, there’s a factor which I consider to be particularly important, and that is long term trust and confidence in the potential of the country. And I think there we have seen things change dramatically towards the better. People place a bigger trust in Government, and that is important, trust is fundamentally critical for all advanced countries that aspire to make a great leap of economic growth. So I think we have a compelling story to tell for the country. We have the economic incentives, we’re in the process of creating the jobs. There’s no reason why people who were abroad would not consider to return to Greece, if their family life or their plans makes them consider this option.
DF
Perhaps there is a connection here also between this theme and another theme you mentioned in this tumultuous year, which is the migration. The migrant crisis. It’s a tragedy, but is there also an opportunity there for Greece to train migrants and to ease them into the workforce in Greece to make up for some of these labor shortages.
PM
Greece is a country that has experience in terms of welcoming economic migrants. We did it in the 90s. And there are a lot of people who actually found in Greece a new home, have made Greece their permanent home and their kids feel and are Greek citizens. And I think it was an overall success story, there is no reason why we should not be able to integrate a reasonable number of people who will be granted asylum and who will choose to actually stay in Greece. There are sectors in Greece, where we actually have labor shortages. That’s a very, very clear fact that’s well defined. On the other hand, the migration problem is way too big, just to be left to Greece or to the countries that constitute the external borders to handle by themselves. I’ve been raising the migration issue with persistence since I became Prime Minister. The tragic Moria fire brought it to the forefront. We’re expecting the proposals of the Commission, they will be presented on Monday about the new migration asylum pact, I think it is very, very clear to everyone that we cannot fail twice as Europe. We’re doing a very, very difficult job in terms of both protecting the borders but also accepting refugees and migrants and then processing their applications, but this needs to be a European project.
DF
So what should happen at the European level, what would you like to see happen?
PM
It is very very clear. First of all, common asylum rules for everyone, a fair burden-sharing process by which we find a way, each country to assume part of the responsibility. Ideally, what you would want to see is all countries to be able to accept some refugees through a relocation scheme. If that proves to be completely impossible, then some countries need to assume for example, responsibility for returns, but everyone needs to be able to do something. What is not acceptable is for countries to just say this is not my problem.
DF
Do you see any sign of the political will for that? I mean, this has been going on for so long and there’s been very little sense of common response.
PM
Allow me to just reply that six months ago, it was inconceivable that Europe would be able to borrow as a supranational entity as it will do now after the conclusions of the Council. So the German presidency is very much pushing, the Commission I think is going to suggest something which I think from what I know was probably going to be an acceptable basis of negotiation for countries such as Greece. A lot of work has been put into into this project. And we need to be very clear who does what. Greece stepped up to the plate and defended the European borders.
PM
We were faced with a very organized attempt to send desperate people into Greece and into Europe; we said this is not going to happen and it didn’t happen and we have reduced the flows significantly. So we are protecting the borders, but people will always be able to come. And once they come, they need to be treated humanely through a common asylum system. If they’re granted political asylum, we need to find a way to see where these people are actually going to live. But if we refuse them asylum, we need to have a European push for these people to be returned to the countries of origin. Otherwise, the system is just not going to work.
DF
Let me turn now to perhaps the most acute problem, crisis that you’ve faced in recent times, and that’s the eastern Mediterranean with Turkey. There seem to be signs, in recent days, of a certain de-escalation; the Oruc Reis is back in Antalya, maybe there’s a bit of breathing room. What happens next?
PM
Well, first of all, let me point out that what happened over the past months, which is very, very concerning to all of us, is not just a problem that relates to Greece and Turkey, or Turkey and Cyprus. It is a problem that has a very clear European dimension. And I think that Europe made it very, very clear that what is at stake here is the overall security in the eastern Mediterranean. And that Europe will, in principle, not accept unilateral actions by Turkey that go against International Law. We’ve said something very, very simple from the beginning. We’re willing to talk and engage with Turkey on the one issue, which is always the topic of the exploratory talks, which is the delimitation of our maritime zones in the Aegean and in the eastern Mediterranean. And there were discussions going on for many, many years; progress was made, we never reached an agreement. We should resume these discussions, again from where they stopped, essentially, in March 2016. And I’ve also been very, very clear that if we cannot reach an agreement, we are certainly willing to take the issue to the International Court in The Hague and respect the decision of the court based on a common understanding that we would sign with Turkey on what it is we ask the Court to make a decision on. So I think what we’re saying is very reasonable and very, very sensible. According to International Law, if two countries claim a specific maritime zone, no unilateral activities are allowed; and it’s pretty straightforward. If we have a disagreement, we don’t engage in unilateral activity. So I hope that this message has been received by Turkey because there is a toolbox regarding possible consequences that Turkey will face if it continues this behavior. I’m the first to say that I’ll be the last person to want Europe to go down that path, but on the other hand, it’s also very, very clear that Europe will stand by Greece, it will stand by Cyprus, it will not be divided on this issue, and we hope that what we saw as the first sign of de-escalation will continue, and that we can actually resume talks without threats, and rhetoric.
DF
So what would be the next sign? You say that the first sign is the departure of the vessel from the region.
PM
It’s pretty obvious that you can’t talk if someone is challenging the subject of the talks unilaterally. That’s pretty clear, we made that very clear. I think the last thing that both countries want is full mobilization of our two fleets, where there’s always the risk of things getting out of control. I think what is important is also, beyond actions, it’s also words, it’s the rhetoric. I’ve been very careful and very, very cautious in making my case very clear, both in print and in what I say, it’s very, very easy to inflame passions when it comes to public opinion.
DF
Have you talked to Mr. Erdogan
PM
I have not spoken to Mr. Erdogan since our last telephone call. But our advisors are in contact, which is, in my mind, important. And if we continue down that path, I’ve said very clearly that I am open to start the exploratory talks very, very soon. And I think once the talks start that in itself, while you talk, you don’t do other things. It seems pretty obvious to me that you can’t do both at the same time. So, we’ll see. I’m concerned by the fact that Turkey continues to issue NAVTEX regarding Cyprus, that is concerning to me, because Cyprus has very similar claims to Greece, but as far as the bilateral relationship is concerned. I do see a window of opportunity.
DF
And one of the next things that is going to happen is the European summit called at your instigation next week that will discuss the Turkey situation. What do you expect to emerge from that?
PM
Well, we’ll see. A week is a long time in politics, especially in European politics. I do hope, I prefer to go into the summit on a positive note than on a negative note. I will refrain from making any predictions. I think, what is very, very clear and if you look also at the statements made by Josep Borell, by Ursula von der Layen, by Charles Michel, Turkey has a choice. It can engage with Europe constructively and, by extrapolation, also engage with us, or it can choose to continue these these unilateral actions, not just here, I am also concerned about what is happening in Libya which is of great concern to other European countries, in which case, there will be consequences. So the choice has been laid out very, very clearly. And I think all of us hope that the choice of the path is one of constructive engagement and, vis-a-vis migration, in theory, there is a statement between the European Union and Turkey that is still applicable. If we were to re-engage with Turkey also in migration, we would respect our end of the deal and Turkey would have to respect its end of the deal which is to accept from the islands returns for those people who are not entitled international protection in Greece. So I think it’s about time to give diplomacy a real chance.
DF
Okay. But meanwhile, give deplomacy a chance, but you’re also investing as you announced last week, quite heavily. You have plans to invest in planes, in the naval capacity of Greece. This is it at a time when budgets are very stretched, of course, when economies are in a difficult state. Is this priority possible to sustain? Is it affordable?
PM
We are a fiscally responsible Government. And I would never have announced these intentions without making sure that over the next 10 to 15 years, because we’re talking about a very long term repayment program, we are able to sustain these investments, I do need to point out that we live in a dangerous neighborhood, Greece will always have a strong deterrence capacity. And it is my responsibility to make sure that I keep it up to speed and that I strengthen it. We announced two major purchases, I’d say both were long overdue. We shouldn’t forget that for over 10 years, Greece has practically made no investment in its armed forces. So the purchase of fighter jets from France is to replace older French fighter jets with a much more advanced plane, and we haven’t purchased new warships, new frigates in a long, long time. It’s about time to do this. Actually, these were requests that have been put in by the armed forces a long time ago. We feel that now, over a longer period of time and with the economy stabilizing, we have the capacity to actually invest in those assets. But it is not just about purchasing weapon systems. It is about modernizing the military service, making sure young men, young kids who join the army will acquire the necessary skills, it is about privatizing and finding investors for our defense industry. We have extremely valuable assets be it in shipyards, or in our aerospace company. It is interesting that we actually have demand, we have countries banging on our door asking us to actually service their planes and we haven’t been able to deliver, that is unacceptable to me. So we will restructure Hellenic Aerospace and make sure we play an important role in the region as a credible defense contractor.
DF
You’ve been very keen and we’ve been hearing over the past few days about the desire to attract foreign investors. And part of that is the Rule of Law, strengthening the Rule of Law, reforming the Justice system. Greece struggles with a reputation for clientelism. And yet there have been some examples recently where you’ve been accused of tweaking the law, for example, to help special interests, to suspend cases against the breach of trust for bankers, for example. How does that reassure investors and what can you do to really assure people that clientelism is a thing of the past in Greece?
PM
I will speak on behalf of the Government, and I think it is important to look at the international indices, international competitiveness indices, international transparency indicies, and see the progress the country is making. I’ve fought clientelism my entire political career. And occasionally I was perceived to be a little bit of an outlier because I was very, very focused on this topic. Meritocracy, which is the opposite of clientelism is critical to me. So I do want to pick the right people for the right job, and certainly when I make selections at the Cabinet level, this is my number one priority. This is also why we’ve been able to attract talent from outside the narrow confines of the party. And I’m happy and proud about that. In terms of the civil service, I think it is significantly more meritocratic than it was. And we’ve also passed a recent legislation, making it very clear that all public sector appointments need to go through a specific process by which there will be a shortlist -we’re talking about Government appointments- of three people independently selected, out of which the Minister would be forced to pick one person. Having said that, I am the first to acknowledge that not so much Rule of Law, but Justice reform is critical. And it’s a long-term process. So as to make sure that we don’t have unnecessary delays and that investors feel comfortable with the legal framework. I do need to point out that we will have a new insolvency legislative framework that is looking at integrating all interventions surrounding bankruptcy, personal bankruptcy, but also corporate bankruptcy. I think it’s a huge step in the right direction, very well received by the international investor community. Very helpful in terms of clarifying under what conditions assets can be liquidated. So, I do acknowledge that in terms of judicial reform, there is still a lot of work to be done, but I expect Greece, this is at least the first indication we have from some of the first competitiveness indices, to significantly improve its position in the main competitiveness indices. This is at least a goal and the benchmark I set for myself and for my Government.
DF
Out of time, but I just wanted for the last couple of minutes, trying to head to the future next year, which is the bicentenary of Greek independence and I wanted to ask, how you think you can use this to, if you like, push Greece forward into a new era.
PM
It is an important date. And always these years are an opportunity to reflect on the past, maybe take look at our history through a different lens, but also it will be an opportunity for me, for the Government, for Greece, I would say, to reintroduce sort of a new ambitious, optimistic, self confident Greece to the world stage. We are planning very significant, for lack of a better word, I will call it a rebranding exercise for the country which will launch at the beginning of 2021. And this is a country which should be very proud about his future. It shouldn’t just rely on being proud of his past. Having said that, there are many aspects of our 200 year history that are particularly relevant in this discussion. And this is a country that overall, if you look at our history, has done quite well. We were one province of the Ottoman Empire. We we fought for independence, we were one of the first countries to gain our independence, but if you look at the other countries in the region, it’s fair to say that we’ve done much better. But there will always be difficult periods. There’s almost sort of a cycle of triumphs and very difficult moments. I hope that this third decade of the 21st century is going to be a good decade for the country, but there will be an opportunity to reassess history to draw interesting lessons but also an opportunity to make the case for the Greece of the future.
DF
So next year won’t be our bicentenary, but for this conference, it will be the quarter century, it’ll be our 25th Government roundtable. So I think we can have a bicentenary and a quarter century and we look forward to […], hopefully in person
PM
Hopefully in person without the masks and with a live audience, It’s always much more pleasant. Thank you and looking forward to joining you again next year.
DF
Thank you very much indeed, Prime Minister.
