I'm Roula Khalaf, editor of the FT.
And I'm joined by Ben Hall, the Europe editor.
We're interviewing Kyriakos Mitsotakis, the prime minister
of Greece, a country that surprised many
with its deft handling of the Covid-19 crisis.
I'm going to dive right in and just
start off by asking you about your Covid-19 experience.
Because a lot of people have been
just watching Greece and wondering,
how did you get it right?
Well, it was certainly a very, very intense period,
as you can imagine.
And looking back to what happened over the past four
months, I think we took some difficult decisions very early
on.
We clearly listened to the experts.
It was very, very obvious to me that, at some point,
we needed to go into full lockdown mode.
And my political decision was to do it
earlier rather than later.
And I think we convinced the people
that we needed to demonstrate collective responsibility
in order to, essentially, protect
what is the most valuable asset that we have,
which is our public health.
And, of course, I also knew coming into the crisis
that we had a relatively small number of ICU beds.
Coming out of a 10-year austerity,
we had an underfunded public health system.
So we could not afford to have our health care
system overrun by Covid-19 cases, which we could not
deal with.
I made it very, very, very clear that we
needed to sacrifice the potential for economic growth
in order to get this crisis under control.
And my argument was also relatively simple.
The more successful you are in quickly flattening the curve
and bringing the crisis under control, the more vigorous
the recovery afterwards.
The second part of the hypothesis
hasn't been proven yet.
But by intervening quickly, I think we have,
essentially, set the foundations for a more robust recovery.
And we've also helped the Greek brand, of course.
Because what you describe came as a surprise to many.
So we got a lot of good press.
And a lot of people were pleasantly
surprised by what they call the Greek success story.
And a lot of people, obviously, are looking forward
to spending a summer holiday in Greece.
And you have just opened up the tourism sector again,
although not for everybody.
The UK is still an exception.
Is that going to come soon?
I think it will come soon.
If things continue to go according to plan,
we should be able to welcome visitors
from the UK as of July 15 - maybe for the first 15 days,
just in a couple of our airports.
So they may have to fly through Athens.
We're still looking at the data.
But we want to make sure that people who come to Greece
do so in a safe manner for themselves,
but also for the local population.
And we've put a lot of effort in making sure
that the experience is as safe as possible.
What does this mean?
As far as I know, we're one of the very few countries,
if not the only country, that actually still does
random but targeted screening of visitors
who actually come to Greece.
So we have a very complicated algorithm
that, essentially, allows us to identify those tourists who
will be screened upon arrival.
We don't force them to go into quarantine.
We just ask them to be careful for a day
until the results come back.
In case they are positive, they, obviously,
need to self-isolate.
But so far, from the data that we
have - because we've been testing people coming
into Greece for the past two months - a very,
very small percentage of people actually test positive.
And we do hope that this trend is going to continue.
You told the Cabinet recently that the tourist season was
going to be very difficult. Yet earlier in the crisis,
your government was a bit more upbeat
and thought that it could salvage the season.
So what's made you more pessimistic?
How much of the season do you think you can actually
save this year?
The very honest answer is I don't know.
Most of our tourists come during the summer.
What we've seen recently, which is optimistic,
is we've seen a lot of bookings, last-moment bookings,
even for the month of July.
So I think as long as people understand
that we've done what needs to be done,
that Greece is a safe destination,
I do expect people who want to travel to have
Greece as their top choice.
And we hope that the trend, the positive momentum,
is going to build during the summer.
Look, last year, we welcomed 33 million visitors.
It's going to be a fraction of that.
I can't give you an exact number.
But probably by the end of July if things go well,
I do expect a much better August and a much better September.
And, hopefully, we can actually extend the season
into October and, why not, November.
Your recovery after the financial crisis
was driven by tourism.
And now, for this year, tourism will not perform the way
that you wanted.
And it has become, in some ways, a liability.
Because you rely on visitors from abroad.
How are you thinking about the diversification of the economy?
How do you make up for that?
We have a very, very aggressive reform agenda.
And our plan is a long-term reform plan.
We really want to transform the Greek economy
into an economy that is going to focus on the green transition,
on the digital transition.
My challenge is to make sure that we do crisis management,
and at the same time, we don't forget about long-term planning
and long-term reforms.
We still have three years in our mandate.
I'll be celebrating my first year in office on July 7.
It feels like it has been - I don't know -
a century in terms of how much has happened really
since I became prime minister.
But I'm very much aware of the fact
that there are long-term reform projects that will actually
change the fabric of the economy, make it more open,
make it more extrovert, make it more competitive.
These are reforms that, essentially, were never
done in Greece.
During the programmes, we had the troika asking us,
forcing us to do reforms.
And there was never really any domestic buy-in.
I think this has changed.
I think Greeks have matured a lot.
And we want to do our own reforms.
And do you think that the management of the Covid-19
crisis gives your government more credibility, more
legitimacy to take even tougher decisions?
I think, yes.
I think certainly what emerged out
of the Covid-19 crisis was a renewed
sense of trust in politics, in institutions, in technocrats.
As you know, Greece has gone through various waves
of populism.
And the first who are always attacked
when the populists come into power are the technocrats.
I view myself both as a politician and as a technocrat.
I think you can actually combine both roles.
So we certainly are much stronger today.
Let's talk about the EU recovery fund.
What are you expecting for Greece?
And you go into the summit in a couple of weeks with optimism?
We need to make sure that by July 20, we have a deal.
And the deal needs to look very similar,
in my mind, to what the commission has proposed.
What has the commission proposed?
A bold, next-generation fund, 750bn - 2/3 grants, 1/3 loans -
financed through the commission, which is going to be able
to raise money on the public markets on behalf of member
states, a clear focus on reforms and on addressing the Covid-19
crisis.
In my mind, we need a longer-term horizon.
We need at least four years for this fund
to actually do the job.
Are you prepared to accept some quite tough conditionality
in return for this money?
Or is there a way that it can be organised
that will be politically acceptable to Greece, as well
as to the Frugal Four?
No.
I'm not prepared to accept any additional tough conditionality
beyond what I consider to be perfectly natural,
which is the framework of The European Semester.
We have a framework in place to monitor the performance
of national economies.
And to the extent that this will apply to everyone,
I don't think any additional strict conditionality
is actually necessary.
And, Ben, at some point, we need to trust each other here.
And this is also even at the level of the council.
Again, the reason why we want to do these reforms
are because in the long-term or even in the medium-term,
they're going to be good for our economy.
If we just go out and spend the money
- the easiest thing is to go and spend money today.
The question is, what is going to be
the impact of these policies?
We did spend a lot of money to make sure that we support jobs
during the Covid-19 crisis.
But we don't want to use the recovery fund in the same way
that we occasionally, in the past, used EU structural funds.
Because if I look at the overall footprint of EU
structural funds for Greece, I'd say
we've done an average job in taking
advantage of what was offered.
If the fund is not agreed, what's
at stake for the eurozone and for Greece's place inside it?
This is not just relevant just for Greece.
I think, literally, the future of the eurozone, of Europe,
of the integrity of the European Union as a whole, is at stake.
I think market reaction in case of a disagreement
is going to be rather negative.
And, of course, the victims are going
to be possibly the weaker, the countries that are perceived
to be the weaker links.
I don't think Greece, if you look at it structurally,
is a weak link today.
But it certainly has a lot of debt.
You can't argue with that.
You mentioned the debt.
And the recovery fund won't make an enormous difference
to Greece's debt burden, which, according to the commission,
should climb up to nearly 200 per cent of GDP.
At some stage, potentially relatively soon,
the whole question of debt sustainability
comes right back into play, doesn't it?
Not necessarily.
Why am I saying that?
If you look at our debt repayment profile, as you know,
until 2032, it's extremely benign.
Greece is able to tap the capital markets regularly
with interest rates that would have been inconceivable
a year ago.
So our debt profile has very, very specific characteristics.
Obviously, we're hit, because our GDP has dropped.
But if we return to a robust growth path,
as was the plan before Covid-19, I
don't consider debt sustainability
to be a real issue for Greece.
Until 2032, in terms of our debt repayment schedule,
we're absolutely fine.
Greece enjoyed a certain amount of Chinese investment, which
helped it to propel it to recovery.
But the geopolitical context is changing quite a lot,
and attitudes are hardening towards Chinese investment.
Do you think that Greece will still
open its arms to Chinese investors in the near future?
We are open to all credible investors.
The big challenge for Greece is to attract foreign investment,
be it through assets that are being privatised.
And we intend to continue with our privatisation programme
despite the Covid-19 hiccup or in terms of greenfield
investment in the country.
We know we need to attract - we need to increase investment
as a percentage of GDP.
We are not overly dependent on Chinese investment.
They've made one big investment in the Port of Piraeus,
which has been a very successful investment.
And we have an agreed plan with Cosco
in terms of how they will proceed.
And, of course, we will honour our agreement.
And I'm sure they will honour their agreement.
Now, of course, the situation regarding
how the European Union deals with China
- and I think we need to speak with one voice with more
confidence - has suddenly emerged
as an important geopolitical challenge for the European
Union.
But I don't see other European countries stop doing business
with China or, in principle, putting a direct ban
on Chinese investment.
So China is, obviously, important for us.
It's also an important market for Chinese tourists.
China is probably the biggest up-and-coming tourist market
for the next decade.
Let's talk about Turkey.
You had a recent call with President Erdogan.
How did that go?
And what can you do, and what are you doing to ease tensions?
Let me point out that when I first
met President Erdogan as new elected prime minister
back in September of 2019 at the United Nations General
Assembly, I told him very openly that I'm looking forward
to opening a new chapter in the Greek-Turkish relations.
But this would mean that we need to stop the sort of aggressive
behaviour, and make sure we follow basic good-neighbourly
relations, and rely on international law to solve
whatever differences we may have.
Unfortunately, Turkey's response on the ground
hasn't been the one that I was hoping for.
Turkey is increasingly behaving aggressively
in the Eastern Mediterranean.
It signed what we consider a totally illegal memorandum
of understanding regarding the delimitation of maritime zones
between Turkey and Libya.
It is very, very active in Libya in complete violation
of what it agreed to do at the Berlin Process.
It is illegally drilling within the exclusive economic zone
of Cyprus.
And, essentially, what we've said is that this behaviour can
no longer continue.
On the other hand, we need to make sure
that channels of communication with Turkey
are being kept open.
The trend that's been observed in the last few months
is that more mainstream parties like yours
have done much better than governments
led by populist leaders.
Does that suggest to you that we've reached a turning point?
Or is this more of a passing phenomenon
and that the rise of the populists will continue?
We were the first country that elected a populist government
to power.
And we paid a very heavy price.
Five years ago to the day was the dramatic week
when the Greek banks closed, when
we held the referendum, when we came
very close to the precipice.
And thank god we made sure that we avoided the worst.
Because the government realised that it had to perform
a U-turn.
But it cost us three years of growth.
But I think Covid-19 did a lot to discredit
those who believe that there are easy
and simplified solutions to complicated problems.
And those who always want to hold
somebody else accountable for their own shortcomings,
this doesn't work when you have to save lives on a daily basis.
Well, Prime Minister, thank you so much.