.jpg)
On Wednesday you will meet with Chancellor Merkel and President Hollande in Brussels. What amendments will you propose for an agreement to be reached?
Next Wednesday, we will engage in a serious discussion that will take into account the progress achieved thus far, and will set a clear timetable for the agreement. As you know, the Greek side has submitted a comprehensive document – a proposal to the institutions that forms the basis of the discussion on the agreement; it does not wholly reflect the positions of the Greek government but rather, the common ground that has been reached during the technical negotiations with the Brussels Group. Furthermore, we will try to close the gap on fiscal measures with alternative proposals to demands we consider unreasonable and unacceptable. Our actions are guided by the expectation that the institutions will also present solutions that are mutually acceptable regarding the issue of debt sustainability. Ultimately, we want a solution that will put a definitive end to talk of a Grexit, which has long been an obstacle to economic stability in Europe—not simply to recycle the problem every six months.
Can you list the financial measures that have already been accepted by the creditors and the measures that are still being discussed?
We are very close to an agreement on the financial aspects, namely on the primary surpluses for the coming years. A number of open issues exist regarding the fiscal measures, although the differences are not irreconcilable provided there is a willingness to find alternatives to decreasing pensions or imposing recessionary measures. Our goal is to include elements of redistribution and social justice in any necessary measures. Therefore, beyond reaching an agreement to end the program, the most crucial factor in my view is our country’s future: how Greece will return to the markets with a competitive economy as soon as possible. To this end, addressing the issue of short-term financing for the coming months will be a key aspect of the agreement. There are technical solutions that can prevent a third program, and simultaneously provide a viable prospect for servicing the debt in the medium-term that will allow Greece access to the markets faster than you can imagine.
Why, then, don’t the institutions like your proposals?
I don’t think that this is the case. Some are reluctant to acknowledge the failure of the Greek program that was implemented during the past five years because this would entail political cost. However, it is not only the Greek side that has to make difficult decisions; Europe, as well as the institutions, must also admit that the prescription of austerity has failed. This is not an easy decision. But let’s consider the cost of perpetuating the crisis or, even worse, the cost of failure.
Austerity policies were implemented in other Eurozone countries, as well. How does the Greek case differ?
Austerity policies concern the entire EZ. The difference in our case is that austerity was applied with unprecedented brutality in Greece, which led to devastating social and economic results. One only needs to look at the political developments that have occurred in the country in recent years. I’ve addressed these results often: unemployment that skyrocketed from 12 to 27% within three years; the shrinking of Greek GDP by 25%; the huge tax burden on lower and middle classes; the humanitarian crisis–with the homeless and the socially excluded growing daily. No other country in Europe experienced such destruction, and for precisely this reason it would be wrong to compare Greece to any other country that implemented a fiscal adjustment program. An assessment of the Irish or Portuguese programs makes it clear that this is an unfortunate comparison. No country in the Eurozone has suffered as much as Greece has.
The conflict between the supporters of austerity and those who believe in incentives for growth has been a critical issue in the negotiation concerning the Greek debt. In your opinion, is it simply a question of economic theory or is there an underlying broader political plan?
It is not simply a question of economic theory. Economic theory is typically constructed to support specific social interests. This why there is not just one economic theory, but many. The key issues at play are primarily social and political in nature: one only needs to compare the European and Greek indices on social inequality before and after the severe crisis of 2008. It is obvious that the crisis and the programs implemented were aimed at reducing labor costs and the social wage, and at further deregulating the labor market in order to create incentives for greater profitability, to increase investments. The big promise was that the growth achieved by this strategy would then be diffused throughout society. It is abundantly clear, however, that this recipe has never worked: it has failed everywhere it has been applied during the last thirty years.
Mr. Tsipras, Greece appears to have an advantage since an exit from the Eurozone would have important consequences for the European project, both financially and geopolitically. Does it seem right to you that European taxpayers should pay for the geopolitical balance of an economic failure?
The Greek side has no intention to intimidate or blackmail anyone. We are fully aware of the difficulties that we, and other European countries called to show solidarity with Greece, are facing. However, Greece is a sovereign nation—despite its economic difficulties–with an obligation to its citizens and the international community to speak with everyone, in an effort to promote economic and geopolitical stability. The truth of the matter, though, is that Greece receives loans. No one hands out money for free. According to a recent report by the German Parliament, Germany has earned 360 mil. Euro from the loans granted to Greece under the program. Consequently, the cost to European taxpayers will be enormous if the negotiation fails. This is why I firmly believe that such a result is not in anyone’s best interest.
Do you think that a defeat of your policy will play a decisive role in the course of the Eurozone?
I think the answer is obvious: a failure [in the negotiation] would mark the beginning of the end for the EZ. If the European political leadership cannot resolve a problem like that of Greece, which is 2% of the EZ’s economy, then what will the reaction of the markets be to countries facing much larger problems, such as Italy, which has a 2 trillion Euro debt, and Spain, and other countries? If Greece fails, the markets will immediately rush to find the next country that will “fail”. The pressures that will be exerted will be unbearable and, in my opinion, unmanageable–despite assurances to the contrary that are being made solely for negotiating purposes. I’m not bringing this up to scare anyone—it’s widely known. I’m bringing this up to clarify that the Greek government does not seek to negotiate in a vacuum or to act selfishly by seeking to pass our burden to other countries. The very opposite is true. If Greece achieves something positive in this negotiation, e.g. less austerity and more growth for the Greek economy and the Greek people, then this will pave the way for a better tomorrow for all European peoples. Thus, it is entirely against common European interests, as well as national interests, especially for the southern countries, for their governments to adopt a combative stance towards a successful Greek negotiation.
Why didn’t you like the proposal recently submitted?
The proposal was unfortunate, but these things happen in a negotiation. We believe that it ignored the common ground achieved during the negotiations with the Brussels Group. The Greek side has made many concessions on a range of issues, but I think everyone knows that we cannot sign a blank check for the continuation of a program that has demonstrably failed. It is simply not possible to ask us to implement measures that no one else has implemented in Europe, or to demand from Greece to act as if elections did not occur four months ago that led to a change in government. It is a matter of principle and substance. Following five years of austerity, it is inconceivable for us to be asked to abolish the lowest pensions and the allowances for the poorest classes, to increase the cost of electricity by 10% for households in a country where thousands of people have no access to electricity, to abolish the heating allowance when there already have been deaths from the cold. These are proposals that we cannot accept–not only because they are outside our popular mandate, but also because if we were to accept them, it would represent a very heavy blow to the Europe of democracy and social solidarity that some of us continue to passionately believe in.
In your opinion, what types of policies should you adopt in order for your country to exit the crisis?
The key problem in Greece is that during these years of the crisis the burden has been shouldered by the poor and the middle classes. What we would have expected from the institutions and our partners is, to take advantage of the fact that there is finally a government in Greece ready to clash with the economic oligarchy, and to really help us to combat tax evasion, corruption, contraband trading and illegal employment. These are the real challenges that Greece faces and this government is the only one that can deliver on a large reform agenda. This will be critical to re-establish Europe’s legitimacy in the eyes of European and Greek citizens. This is the great challenge for Europe and Greece.
Do you foresee elections? If an agreement is not reached, what will your next move be? What will be your next steps?
I don’t foresee, nor do I wish for, elections. There is no reason to hold elections. We recently received a popular mandate and within three months, despite the uncertainty of the negotiations, all polls show that our support has increased. Our people, in this difficult situation, support us and we will not let them down. During our four-year term we will complete our work.
Mr Renzi stated that, “it is inconceivable for the Italians who stopped paying early pensions, to agree that they be paid to the Greeks. Greece must implement the reforms that we implemented”. What is your response?
I’ll speak to Matteo and will explain to him why on this matter he’s got it wrong. Concerning early retirement, the Greek side included a commitment to abolish early pensions in its proposal. However, comparisons are generally incorrect. The fiscal adjustment that occurred in Greece is not comparable with the interventions carried out by other countries of the South. Greece reduced pensions by 44% within five years, it imposed wage reductions by up to 32% in the private sector, it dissolved the labor market, it demolished the social state, it bled dry employees and the middle class with taxes, it reached 1.5 million unemployed in a country with an active population of 6 million.
