Conversation between Kyriakos Mitsotakis and Niall Ferguson during the World Economic Forum in Davos

he has been Prime Minister since July last year I wanted to just begin with the little note about his academic credentials because he is a Harvard a B has a Stanford master's degree and an MBA from Harvard Business School and I discovered in preparing for this event that you won the hoops prize at Harvard which is something do what nobody has any idea what the hoops prizes explain what it is prestigious thing you can get as a Harvard undergraduate it's given for the best senior theses which means you did a really substantive piece of work well thank you that's kind of you to to remember that it was actually a thesis on populism ah interestingly enough written back in written back in 1990 and I was looking at Greek American foreign relations and what extend a populist rhetoric constrains foreign policy and whether you can actually play that double game of saying one thing to your domestic audience and something completely different when you try to do an international negotiation so when I go back and read it there's still some you know interesting messages about you know the power of populism but also about how you can actually defeat populism which is what we did in practice in the previous elections this is music to my ears as a former Harvard professor we actually teach people useful stuff Henry Kissinger once upon a time a Harvard professor observed that when you actually enter the real world of politics many of your ideas from academia fall apart his real politics very different from the politics you studied at Harvard yes in what way well first of all given that I come from a political family I was able to combine my sort of academic interests with with an experience of what real politics is is all about but I think nothing really prepares you for the demand of the responsibility and the weight of the office and the need to take quick decisions the fact that you actually are forced make decisions without having access to all the necessary information and about the psychological reality that occasionally if there is no such thing is a good decision there is a less bad decision that you can actually take but what we have proven in practice is that you're actually rewarded if you move very quickly remember we had one discussion before I got elected Prime Minister and one of the topics we discussed was how quickly do you actually engage in a reform agenda and I was telling you at the time that everyone gave me advice that you need to do all the reforms very quickly at the beginning of the electoral cycle then when you look back historically very few governments actually are able to do that so I think we're actually breaking with that trend we would very quickly to deliver on our complete reform agenda we lowered taxes for businesses and individuals and real estate we significantly improve the business climate in in Greece we've intervened in the banking sector all this is reflected in our borrowing costs there are days when they're lower than Italy is borrowing costs who would have thought so even you know six months ago our stock market was the best performing stock market in in the world the president tried to point out he was very happy about it he was not a word of fact but I think we're just at the beginning of a long term cycle of growth for Greece because the fundamentals are there and what do I mean by fundamentals there's all political stability ten years ago you know Prime Minister who was here at Davos in January of 2010 was not aware of the fact at the time that the country was heading towards a bankruptcy and look how we were we are now 10 years later we have a stable government with an absolute majority a committed center-right reform oriented party in power you don't find many many of those in Europe these days you just look at you know other European countries the complexities of coalition building how difficult it is to actually form a government look at what's happening in Spain the worst are having in Italy it's difficult to form a government these days so the fact that we actually have a government with a clear mandate we have any elections until 2023 is I think very encouraging for those people who look at the macro political risk and then if you look at the substance of what we are doing I think the policies are right the economy is responding business confidence is booming people are investing again in Greece and there's also something quite intangible if you come to Athens now you'll feel it I mean you really sense a sense of optimism that hasn't been there for a long long time so it's remarkable to look back on the last 10 years at Davos your predecessors were frequently followed around by gangs of journalists asking about the next phase of the crisis I can remember seeing mr. tsipras almost fleeing through the main Congress Center and the turnarounds remarkable I think it's worth spelling out maybe for those with short memories that we suffered by far the worst economic performance of any development country during the financial crisis it was the only place where there really was a great depression yeah and now when one looks at the indicators growth up from 1.8 percent last year to projected 2.3 percent this year the debt which was three with the Great nightmare mountain on a declining path from 181 percent of GDP to 175 percent last year it's going to go down below 170 percent this year unemployment is on a downward trajectory current account of fiscal balance positive and here's an interesting stat growth fixed capital formation up ten percent last year expected to grow another nearly 13 percent this year this is an amazing turnaround story you're going to claim all the credit for it mmm no but what I were I what I can tell you is that back in essentially we had two crises that Hitler sequentially Greece was exiting the crisis in 2014 then we had our experiment with population which really was very very painful for for the country people still forget that we had to go through capital controls that banks that actually you know closed their doors weeks in July 2015 we came very close to actually crashing out of of the Euro and it was only as a result of a rim of a spectacular what has been termed since a cola tomba huge you term done by the by mr. tsipras that we managed sustain the eurozone and then we followed uh you know a fiscal policy that delivered results but over tax the middle class so didn't really deliver any any any real growth but if you just look at the pattern of what has happened since the election we are in a completely different trajectory and that was always my case to the Greek electorate giving me a mandate to really change the country and to make sure that we have left the the crisis behind us so I do expect growth in 2020 to be close to 3% but I think this is a sustainable growth dimensional growth capital formation this is probably our number one challenge we're way behind you a versus we need more direct investment in Greece we I think we are we're on a good path to convince our creditors to use the returns from the profits of the central banks that we call the S&P santan force as an instrument to encourage private capital formation in greece which i think is the right is the right approach and i think we're also in a good path to convince our creditors that they need to relax our fiscal targets for 2021 to give us more fiscal space to further cut taxes because there was always a grand bargain implied for greece you do the reforms and we help you with more fiscal space now no greek government ever convinced even itself that they wanted to do reforms we do the reforms because we think they're necessary for the country not because they are part of any post program arrangement so now people look at will say okay supply-side reforms are being addressed difficult reforms are being are being done let's we should probably give the government more fiscal space we're still run a very tight ship we're sitting on close to 40 billion of cash reserves so this is not a question I mean we could access the capital markets much more systematically we just don't need to do it we've repaid the IMF so this is not no longer a question of us not having access to the capital markets and our debt may be high in objective terms but if you look at our debt repayment schedule until 2030 - it's extremely benign so there is no real issue regarding our debt sustainability so I think we're making this case very I hope very convincingly and there are also other issues which need to be addressed for example we don't have a I'm using some technical terms that I'm sure the audience understands them we don't have a smoothing mechanism for our primary surplus so it could deliver a bigger primary surplus let's say as we will in 2019 there's no way for me to carry it over to the next year doesn't make any sense whatsoever then my incentive is suspended at the end of the year but that's not seriously school policy so I will not be and I think we will be able to get the smoothing Macanese by which it will over perform in one year let it count towards the next year that's what long-term fiscal management and fiscal planning is all about so I think for the first time we're approaching the Europeans with a concrete plan this is what we want to do this is what we ask through you and I think you know the Eurogroup overall but also the institution's have been very receptive to our story and the good news is that attitudes on fiscal policy seem to be in quite a state of flux it used to all be about monetary policy plus austerity and the fiscal side one sense is in the wider policy community amongst the economists that actually there are limits to monetary policy and now we need to think about some kind of fiscal expansion not least in the core economy Germany so that's very helpful yes and I would very much hope that this is also a message that resonates in termini regarding German politics in no position to give advice to the German government oh go on but general you know the general trend seems to me that you know an environment as you said where monetary policy has reached its limits were structural reforms need to be re-evaluated I'm not sure now the traditional playbook for structural reforms that you know we had from you know all the big multilateral institutions is it's as relevant it's as relevant today as it was but clearly we need to be we need to become more productive but fiscal policy is an instrument we need to use in a very benign interest rate environment and again Greece is running up youth primary surplus I mean from three and a half percent to go down to two percent we are still in our in a fiscal straitjacket it's not that we've decided to you know go ahead and you know and spend our way out of the crisis plus there's also another aspect there was always a skepticism that if you give Greece fiscal space Greek politicians will return to their old patronage politics and start hiring people in the public administration I kept my teeth politically in trying to reform public administration so when I tell people this is not going to happen we want to reform the public administration we want to make it digital but it's not a question of just hiring people right left and center will hire people where we actually need to hire people I think I have some credibility in making that case so what are the things we should look for in terms of reforms because in a way we we need persuading that you really are changing the politics of Greece in a fundamental way what are the things that we should look for this year to judge you by well first of all one important reform that still emphasis is a pension reform we are we will be legislating a new pension system regarding primarily focused on on the first pillar on the mandatory redistributed pension because the previous law centrally gave very little incentive to people to actually stay on and work and it was a very lots of incentives to actually quit work relatively early on there's significant reforms that would take place on signaled insolvency and private bankruptcy this is particularly important for banks as they address the NPL a program significant reforms on energy I really want to focus on that because it's an interesting story what we came into power the Public Power Corporation largest company in the country 51% owned by the state was on the verge of bankruptcy now in six months it's success stories surprise has tripled it has gone through a rapid restructuring we're opening up our energy markets we're privatizing partially privatizing our networks big push on on renewables so energy reform is a big core of what we want to do for for 2020 and frankly we're going down to doing business index of the World Bank looking at all the aspects where we lag behind and try to address all of them there is no single issue which we left an address would you leave an address for me the biggest long-term challenge is education it's not just a great challenge but our public education has there's some real value in there but it's completely disconnected from from the private sector we actually have a piece of legislation now that is really freeing up universities giving them more potential to cooperate you know we have we had an open call to ask for American universities to come to visit please to establish you know cooperation with great universities we have space for 12 US universities we had 190 that actually applied to come and visit Greece and see how they can cooperate with universities were offering the first very part of that foreign English course by the University of Athens and classics catered to foreign students Greece should really be a regional educational powerhouse and we're leaving money on the table when we when we are not doing that and of course another issue which is important when you look at all these rankings gender balance I'm proud that yesterday we elected the first female president in the history of the Hellenic Republic it was my proposal it was a bold proposal she ended up getting cross-party support 261 members of parliament around the border for her she's a top judge who's moving to become president of the republic highly qualified woman with a lot of sensitivities on human rights but also in the environment and the first female head of state in Greece it's I think it may be also symbolically important that we are moving into we're moving into a new era it was more than just the fact that she was or is a woman it's also the fact that this is not a party political yeah a point maker and that that seems like one of those ways in which you are meaningfully changing the game and in Greek politics was that part of your thinking yes it was I mean there were a lot of highly qualified experienced politicians who would get a job but I decided to make a paradigm shift and that's why I and it was very well very well received by the general public and I'm sure it's gonna be an excellent president the president is primarily ceremonial in Greece but you still the head of state and has specific constitutional power so on the symbolism but also on the substance I think it will end up being a very good choice for the country can I turn that to the broader question of the future of Europe having been for some time a whipping boy of European politics you've now put Greece in a position where yeah plausibly you can start telling the Germans how to think about fiscal policy but I'd like to ask you a broader question about your vision of Europe what one sense is a generational change happening here new European leadership how do you see the future of Europe because one can't really look back in the last ten years and say it's been a great success actually yes and no I think a lot of things we can be proud of if you look at the last five years you know dealing with the financial crisis you know in spite of the difficulties the fact that we didn't have the right instruments big mistakes were made but we developed a capacity to address these types of systemic shock so if you look at growth in Europe it's been pretty good over the past you know five years lots of jobs being created Europe a pioneer in in data regulation so it's becoming a regulatory powerhouse in a good sense because it could also be in a bad sense so I think there a lot of aspects about Europe that are interesting and I think the outgoing Commission and jean-claude you incur on many fronts did up did a good job but I'm very happy that the new team that's very dramatic it's a because I'm not sure I would be quite so enthusiastic in my assessment of the last ten years well I'm talking about I said you see a focus on the last five years but but on other areas clearly a lot of progress needs to be made I like the agenda put forward by Ursula von der Leyen and we've spoken a lot about it I'm a supporter I'm a fan of an ambitious agenda both on climate on skills but also in Europe you know playing a more political role which frankly there's a lot to be desired there we have in our part of the world we see a lack of European leadership on issues such as migration for example what we say Europe I think has failed right across the board we can discuss that so I'd like to see the glass half-empty yes there is a generational change you know president the council president of the of the Commission a new generation of leaders coming in the council that I think look at the world through a different lens and really want you know a united Europe to punch above its above its weight so for us this is no longer about going to Europe complaining about our own problems it's about going to Europe and contributing to a European debate or to a regional debate when we talk about our part of the world this is not a question just about us you know when our problems we may have with with Turkey is about you know the eastern Mediterranean why it's important for the stability of of Europe while Europe needs to invest more in this part of the world as a whole so we we want to you know we want to be part of the important discussions about the future of Europe and I think we have the credibility to do it let's talk about migration because that was one of the great crises of the last a decade it hasn't gone away and Greece has been one of those European Member States this had to bear the brunt of refugee inflows tell us the situation as it now stands in Greece and also what you think needs to be done at the European level to come up with some more equitable burden-sharing we've had increased flows of refugees and migrants over the past six months and we have a problematic a difficult situation on our island especially the islands of Medellin Ian here's our significantly overburden there was a big meeting in Athens today with my team and the people from from the region and the mayor tried really what I understand absolutely understand and we will support the people on the islands because they feel that you're swamped right now with increased flows why did this happen I don't know but to a certain extent the were statements made by Turkey that they want to use refugees as a geopolitical lever to push Europe to be more cooperative we want to cooperate with toucan refugees but that's not the way to do it frankly so what we are doing there are two levels what we are doing is Greece and what your openness to you do needs to be doing we've changed our asylum law because it has gone into effect so very first we're processing applications much faster we need final decisions within two months if you granted refugee status you're free to stay work in the country or move to to Europe but if not you need to be returned if you're Syrian you need to be returned to Turkey fast otherwise you can be returned to Turkey or to your countries of origin and we need bigger infrastructure on the islands so we're building new new centers on the islands where we can also keep people that have to be returned in a more confined facility so this is a very different policy from what the previous government did which essentially let anybody in and we inherited 80,000 asylum applications that were in the process of being processed no final decisions being made so that's what we're doing on the Greek side but of course Europe has a scaled-down migration to come up with a unified strategy and I'll be very very blunt you cannot be part of Schengen expect to take advantage of the free movement of people and not participate in any burden sharing you are a migration it's just not fair it's just not right so as we come up with a European compact on migration and refugees the vice-president of the Commission Margaret is gmask highly qualified in charge of the portfolio also happens to be Greek so we're in close touch with him we would envision a mechanism by which decisions could be made you know at the borders in some sort of border country but also European facility same rules apply to everyone burden-sharing for those who actually get refugee status and a unified European mechanism for those who don't and get need to be returned to the countries of of origin but we need to agree that some burden sharing is going to take place you know there's I had take taken a particular interest in unaccompanied minors which is a dramatic problem and one would really should touch anybody's hearts and when I reached out to many European countries help us on this issue honestly the response I got was not what I what I expected I don't think anyone is gonna be threatened if they receive 100 children because these are the numbers were already talking about if you if you distribute them to too many European the countries some countries are being cooperative some have not so at some point I think we need to get our act together and make a very clear case that this is not just a question of a Coalition of the Willing this is a core European policy it needs support from everyone and if you want to be part of Schengen you gotta play ball and make sure that you also assume your responsibilities as far as migration and the refugee crisis is concerned it'd be wrong not to talk about Libya one can talk about the migration crisis without looking at what's going on on the other side of the Mediterranean and you are in the midst of something of a crisis with respect to to turkeys decision to sign an exclusive economic zone agreement with the tripoli government fill us in on the situation there and and how you think it's going to play out because you have reacted quite firmly to this initiative which seem to entirely sidelined Greece well this is you just need to look at the map to understand why this is not just legally but also geographically preposterous Greece and Turkey sorry Libya and and Turkey don't have any opposing coast so you cannot sign a delimitation agreement regarding maritime zones in this case what has been signed completely disregards the fact that our Islands have right to an exclusive economic zone which goes against everything we know in international law and of course we all know that this agreement was signed in exchange for Turkey military support to the shiraz government and on top of that it's an agreement that has not been recognized by the libyan legislature and you know three-quarters of the country that is represented by somebody somebody else basically says that this agreement is against the interests of the Libyan people so we've said very very clearly that we don't recognize this agreement we got the European Council to say the same thing that this is an illegal agreement and I've also made it very very clear to everyone concerned that there's not gonna be a political solution in Libya to which the European Union will have to agree in in which case we would need to agree where we will agree unless these agreements are scrapped and this is not just about Greece vs. Turkey this is about the eastern Mediterranean it's about energy security it's about the ability to build a pipeline that actually brings gas from the eastern Mediterranean to the European Union whether it's Cypriot gas Israeli gas potentially Greek gas we don't need Turkish permission to do that Turkey is always invited at the table I want to make it very clear these are not agreements that intend to exclude turkey from anything but at the end of the day one has to accept that we have to play by the rules of international law and in my mind spoilers should not be rewarded because it's easy to be a scorer but at the end of the day one needs to draw a line between those who are spoilers and those who play by who play by the rules and we are a rules-based transnational institution that's what the European Union is and I'm very happy that the council level we have full support of the all the European Union countries that what has happened between Libya and Turkey is is illegal and does not produce any direct legal ramifications well we're almost out of time in what is frustrating me brief slot but let me let me conclude by asking you a little but NATO when the French president Emmanuel macron described NATO in an interview last year as as brain-dead I have to confess I was somewhat surprised his NATO brain-dead no NATO is not brain-dead and it continues to be the pillar of the transatlantic relationship as a transatlantic security organization it is irreplaceable that doesn't mean that the European Union on its own should not develop a stronger defense capacity and the ability to take decisions on the foreign policy and on the defense level speaking one language for example in Libya we have not we have not yet been able to do that indeed it was it was sort of frustrating because found ourselves in a transition period you have a new commission coming in a new head of European diplomacy coming in but we have to speak with with one language on these issues otherwise we'll let other other people at the table and these are poor issues of course security issues for we for Europe so no NATO is not never brain-dead far from it at the same time there are European countries that are interested in cooperating more on security and defence Greece is clearly one of them we spend more than 2 percent of our GDP on defense so we have assets to add and bring to the table and there is merit in the discussion regarding a more coherent European defence strategy is this an opportunity once again to offer some words of advice to Germany which is not one of those countries that meets its 2-percent I think Germany is gradually its nudging itself towards the towards the 2 percent threshold but again as I sense that you have a particular interest in this I have a very good relationship with Chancellor and made it very clear to her that I think it was a mistake that we were not invited to the Berlin process and that we should participate going forward very clear on that issue we are the closest neighbor to Libby Ana I think that this request will be accepted and is not just about Greece vs Turkey it's about Greece being the closest neighbor to Libya . and a member of the European Union and NATO but what's important is that we're changing a narrative of Germany this is no longer an acrimonious relationship about debtors versus creditors I will be in Berlin in the beginning of of March with the Chancellor to participate in a forum on green energy and how to engage Greek German companies to invest more in the opportunities that green that Greece has to offer on the sustainable energy front so we're changing the narrative in our debate with Germany I think it's it's to our common interest to do that and that gives us a nice segue into your next double session which is going to be on environmental issues perhaps you just like to give us a very brief glimpse of how you see Greece's green strategy I know you have first of all we are at the forefront of climate change you know before the Australian bushfires we had a hundred people die in in a in a wildfire that became uncontainable a lot to do with also incompetence in dealing with the issue but clearly we will be faced with with with these with a consequence of climate change much sooner than many people anticipate Greece has the potential to be a as you know a sustainable energy powerhouse unlimited access to wind and solar and we intend to play that role we are we're moving off called the lignite in our case much faster than we had anticipated we'll shut down or our lignite producing plants by 2023 about one by 2028 we'll be completely off lignite much faster than anybody had anticipated we're making the switch to what national gas in the meantime but also clean energy in a in a very fast but also very organized manner so this is very important for us Prime Minister thanks very much for giving us your time and answering my question so exactly ladies and gentlemen thank you [Applause]

Channel: Ο Πρωθυπουργός

Views: 38,518

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Keywords: davos, mitsotakis, μητσοτακης, World Economic Forum

Id: 4K7saNpsVzc

Length: 30min 16sec (1816 seconds)

Published: Thu Jan 23 2020