Caroline Hyde: Prime Minister Mitsotakis is with us of Greece. It is wonderful to have you here in New York.
Kyriakos Mitsotakis: Thanks for having me.
Caroline Hyde: Joining for the United Nations General Assembly is what brings you here to the joy of the traffic. I’m interested, Prime Minister. The latest rhetoric coming from President Putin today. Once again, the escalation, the concerns about annexations, about nuclear threats, of course, about bringing in more troops. What’s your response?
Kyriakos Mitsotakis: What I can tell you is that we are all united in supporting Ukraine defend itself against what is an open act of aggression that violates all existing norms of international relations. And speaking as a Greek, but also as a European leader, we know what’s at stake here, and it goes beyond just Ukraine. I think we need to send a signal to any authoritarian leader who thinks that they can change borders by force, that this simply will not be tolerated by the community of democratic states. The war is not going well for Russia. That’s very clear. And I think President Putin is going to try everything to turn the table, but I’m convinced that he will not succeed.
Caroline Hyde: Of course, much of what has been the impact on Europe, on your citizens, has been the cost increases. Of course, the impact on energy in particular, is what residents, consumers have felt. I know that Greece has time and time again been coming to support in terms of money being offered to businesses, to people. Once again, another €1.1 billion today. How much are you able to continue to financially achieve that? Particularly you’re focusing on taxing some of the profits of energy companies.
Kyriakos Mitsotakis: We have to send a very clear signal that we will not be blackmailed by Russia when it comes to the availability and the price of gas. We need to do it at the national level, and we also need more European cooperation. Personally, I’ve been making the case for imposing a cap on all gas that is imported into the European Union since March. I’m not sure we will be able to get to that point. But we’ve taken important decisions at the European level in terms of reducing our dependence on Russian gas.
At the same time, in order to make sure that we maintain social cohesion, we need to support our societies, and we need to do it both by spending money from the budget, but also by recycling windfall profits from the energy producers into special funds that will help us subsidize the prices of electricity and gas. This is exactly what we’ve done in Greece. I think we were pioneers. If you look at what the European Commission is currently suggesting other European countries should do, they’re really following the Greek model, which has already been put in place for three months, and it’s really delivering.
We have reclaimed more than €2 billion in extra profits to be placed in the special fund, which allows us to offer some support. I would actually say considerable support to households and businesses to make sure that they make it through what is a difficult winter. If we do not do that, then there is a real risk that our societies will not go along in terms of supporting Ukraine and will start putting pressure on us to compromise, which frankly, is not an option. So we need to do that. We also need to be aware of the fact that as we transition away from gas, there needs to be an acceleration, an even greater acceleration in putting in place renewable energy. We are doing that. We are leaders in Greece. We are one of the top ten countries in terms of the participation of renewables in our electricity mix. We’ll be adding almost two gigawatts of renewable energy just in 2022. We continue to invest in our grids and of course, we also aspire for Greece to play a regional role as an entry point for energy into the European Union.
We’re beefing up our LNG infrastructure. So we want to bring in more LNG through Greece, not just to serve the needs of the Greek market, but also to support our Balkan neighbors. And of course, we want to build electricity interconnections between Greece, the Middle East, Cyprus, Israel, but also Egypt.
Caroline Hyde: Is this an opportunity, therefore, from an economic standpoint for Greece?
Kyriakos Mitsotakis: Yes, it is. Every crisis is potentially also an opportunity. But again, what we need to do is to make sure that the price that people pay for energy is not exorbitant.
Of course, now there’s also an additional incentive for people to make sure that they save energy. The way we have staggered our subsidies encourages people to save energy. So we give them more of a subsidy if they reduce our energy consumption by 15%. So we measure energy consumption year on year, and the more energy they save, the more beneficial it will be. Also because they will get a higher subsidy.
We’re putting in place schemes to replace all old appliances which are extremely energy consuming. For example, in Greece we have so many air conditioning units. If you compare the energy consumption of an old air conditioning unit versus a new one, there’s a saving that almost reaches 50%. And of course, as you said, we want to be part of the new geopolitical energy map, and I think we know how to get there.
Caroline Hyde: What about what the European Commission has announced this far, do you think? You’ve said in some ways they’re following your lead. Has enough been done?
Kyriakos Mitsotakis: I’ll be very honest with you. I will continue to advocate for a cap. And every time we speak about a cap, the markets take notice of it and they adjust. Why am I talking about a cap in Europe? Because the gas market in Europe is broken. You don’t need to be an energy expert to understand that there is no real correlation between supply and demand. The prices of gas have increased tenfold. We pay much more for gas in Europe than you pay in the US. Or that Japan pays or China pays for its imports of natural gas.
So I think we need a more drastic intervention that will not just target Russian gas, but will impose a cap on the TTF index. Will we get there? I don’t know. What we’ve done so far is certainly moving in the right direction. For example, imposing at the European level a taxation on the windfall profits of refineries. We will use those profits to subsidize heating oil, which is important for people who need to heat their houses during the winter. But again, the big challenge is to understand that the push towards renewables is no longer just an economic play, it’s also a geopolitical play.
Caroline Hyde: Yeah. Talk to me about the concern you have about that winter. You’re saying you’re looking to ensure that you’re protecting your own consumers, your own people. What about those who want to come to Greece, that want to spend money in Greece? You’ve been doing incredibly well in terms of tourism. You’ve actually increased your outlook for your economy on the back of it. Do you worry that if Europe has a very bad winter, people won’t be able to afford to be coming?
Kyriakos Mitsotakis: Look, I mean, a recession is bad for the economy in general, but I think the Greek tourism industry has recovered remarkably, and we’re probably heading towards a record year. And I think this is not just “revenge travel”. I think Greece has become an attractive destination, not just during the summer, not just for the islands. We’re focusing a lot on sustainability.
And of course, I think we’re also bridging this divide between just coming to Greece for pleasure and also coming to Greece for work. There are a lot of digital nomads who relocate to Greece now. We have significant incentives in place. It’s a great place, not just to visit, but also to work from, to retire. Maybe it’s also a great place for Northern Europeans to spend their winter because they’ll definitely want to save money on their heating bill. So spend some time in Greece during the winter, you’re going to have a great time, and it’s probably going to be cheaper for you.
Caroline Hyde: You’re a good salesperson. It sounds delightful. Prime Minister, talk to us a little bit about some of the international relations anxieties that have been dialed up a bit here at the United Nations. In particular, I’m thinking the leader of Turkey. Once again, we know that animosity has been long between Turkey and Greece in some relations, but we know that there’s been talking about accusation of even crimes against humanity leveled at Greece from Turkey. Your response? How is the US and Europe guiding you through this?
Kyriakos Mitsotakis: I will have a chance to respond to President Erdoğan when I deliver my speech on Friday. Accusing Greece of crimes against humanity on the question of migration is simply preposterous. It is preposterous because it is Turkey that has been weaponizing migrants very openly and very publicly over the past two years, trying to encourage them, send them to the Greek border, trying to push them into Europe.
We save tens of thousands. We’ve saved tens of thousands of people at risk at sea. We defend our borders as we have an obligation to do, but we also respect fundamental rights and we should be working with Turkey to address this issue rather than accepting sort of Turkey pointing fingers at us. In general, we’ve seen a crescendo of Turkish rhetoric against Greece which is plainly unacceptable. I think this is something which has been communicated to Turkey by the leadership of the European Union, but also by the US. We do not need another source of geopolitical instability in the Eastern Mediterranean when we’re fighting a war against Russia and we try to support Ukraine.
Caroline Hyde: Why is Erdoğan doing this, do you think?
Kyriakos Mitsotakis: I think a part of it is domestic politics, but that’s his problem and not mine. We are destined by geography to live together. And as I’ve told him many times, we should be able to even agree to disagree, but do it in a civilized manner. Questioning the sovereignty of a NATO ally is plainly unacceptable. It cannot be tolerated by Greece, and it essentially portrays Turkey as a country which is no longer sort of part of what we used to call the Western alliance. So, President Erdoğan at present refuses to meet with me. I’ve openly said that I’m always open to have a discussion, but I think it is in the interest of regional stability to significantly dial down the intensity of the rhetoric. He doesn’t help anyone, I think, not even himself, if he continues down that path.
Caroline Hyde: Prime Minister Mitsotakis, I’m going to start asking some relatively sensitive questions about your own domestic politics now, because I know that there has been an ongoing concern around a spy scandal that sort of engulfed your government. Can you talk to us? I mean, of course, many don’t know that your government has of course acknowledged that there was a wiretap on an opposition leader’s phone. You moved, you said it was, of course, legal, but perhaps wrong. But this has escalated and become more controversial. Where does it stand now and how worried are you about your own reputation?
Kyriakos Mitsotakis: This is a serious issue which I’ve addressed very openly from the very beginning, courageously admitting that a mistake was made, making personnel changes and making sure that we have even stricter filters when it comes to the issue of wiretapping. At the same time, there’s also a much broader problem that needs to be addressed, and this is the proliferation of illegal spyware across Europe. This is something which does not only affect Greece, it affects many other European countries. And we need to tread a very fine line between making sure that we protect fundamental rights, but also don’t compromise the ability of our security services to be able to do their job. And I think that we need to take a lead when it comes to making sure that we ban the sale of this type of illegal software that allows access to your phone without you even being aware of it. And this needs a European response. So it is a serious issue. We have addressed it with honesty and transparency, and we want to make sure that we further strengthen the capability of our intelligence services to do their job, but with the necessary oversight that allows people to feel comfortable with the way they operate.
Caroline Hyde: You talked about your courageous endeavor to bring transparency to admit wrongdoing. What about your government’s stability therefore? Do you think that that’s intact at the moment?
Kyriakos Mitsotakis: This government is extremely stable, and I think this is important because we’ve been able to deliver real reforms over the past three years. We’re entering an election year. We’ll have an election in the spring or early summer of 2023.
Our government is still way ahead in the polls and we’re aiming for another absolute majority. I think you’re right to point out that during these difficult times, political stability is of particular importance.
We are also living at a time when many powers may have an interest in destabilizing democratically elected European governments. At the end of the day, we are a very well functioning democracy, we have a lot of faith in Greek people. We will present our track record when the time comes. And we hope that they will entrust us once more with the responsibility of leading the country. Because I think what they know is that we’ve dealt with extremely difficult situations, with competence, and that Greece now is in a much better position than it was when we took over in 2019.
Caroline Hyde: Fiscally speaking, debt wise speaking. And to that end, investment grade on the horizon, do you think? Does it need an election for that?
Kyriakos Mitsotakis: First of all, in terms of the fiscal position, yes we are in a much better position now than we were. We delivered on our promises. We lowered taxes without compromising fiscal sustainability. We proved that you can actually lower taxes, deliver growth without compromising your fiscal path. And this is important for a country such as Greece who will have the most significant, the fastest reduction in debt as a percentage of GDP of any European country this year.
I would imagine that, yes, the rating agencies will look at the political situation and what will happen in 2023. But I’m convinced we will get to investment grade by then. It will be the fitting end to a very painful period which started back in 2010. Greek people have suffered a lot, they’ve had to endure a lot. But I think that Greece has proven also in terms of foreign direct investment, in terms of the real transformation that is taking place, that it can be a pleasant surprise and that it can be in the headlines not for the wrong reasons, but for the right reasons.
Caroline Hyde: Are you optimistic at this time of the United Nations coming together with great global concerns, but it really feels like…
Kyriakos Mitsotakis: I think I’m a realist. We understand that the challenges are monumental, but at the same time, we have an obligation to charter a path through very sort of turbulent waters. And I think we’ve proven that we have the ability to be good crisis managers, but at the same time also put in place the long term reforms that will really allow us to change the country substantially. I’m not just interested in small scale change, in simply managing the everyday sort of political cycle. What we try to do is something much more substantial, and I think we’ve laid the foundations. A lot remains to be done. I’m fully aware of the fact that we have big difficulties, but, yes, I remain quite optimistic about the prospects of the country.
Caroline Hyde: Come on again with us and tell us about how that process continues to evolve. We wish you well in your Friday speech as well.
Kyriakos Mitsotakis: Thank you.
