JOURNALIST: Greece is at the focus of the debate in Germany ahead of the elections. Merkel is saying no to a new “haircut” for the Greek debt, Schäuble rules one out. Are you optimistic that they will change their stance following the elections, or will Greece drag on in uncertainty?
E. VENIZELOS: Greece should not be at the focus of the final stage of the run-up to the elections in Germany. In no country does the pre-election climate allow for composed, rational debate based on data. The result is that the sacrifices and achievements of the Greek people – who achieved the biggest and fastest fiscal adaptation in the world – have been sold short. This is detrimental to the eurozone as a whole. Unfortunately, negative stereotypes about Greece are being bandied about again, hindering the huge effort that is being made in the area of structural changes. It is extremely difficult to promote such changes in the state and the economy under conditions of long-term recession, unacceptably high unemployment and falling incomes. I hear the argument that the German citizen has to know whether he will need to give more help to Greece. The response is that Germany, as the largest economy in the eurozone, is helping us considerably, but it is not donating anything to us. Authoritative German economists like Professor Bofinger have explained what Germany is gaining directly from the interest on the loans to Greece. And mainly what it is gaining indirectly, due to the crisis, with the strengthening of its own balance of payments and the further reduction of interest on its own loans.
JOURNALIST: But is there an issue of the sustainability of the Greek sovereign debt, a funding shortfall in 2016, a fiscal shortfall for 2014-2015?
E. VENIZELOS: The sustainability of the sovereign debt of each country is a system of macroeconomic and financial data, assumptions and predictions: the size of the primary deficit or surplus; growth rate; when bonds or loans mature or expire, coming up for payment; what is the average duration of the debt and the average interest rate. We have succeeded – and I experienced this first hand, as the Finance Minister – not only in reducing the volume of the debt by €130 billion – that is, by 65% of GDP (the largest reduction in history) – but also in greatly extending the average duration while reducing the average interest rate to a minimum; reducing, that is, the cost of servicing the debt. In a theoretical framework that exists for the sustainability of the debt, the assumption is that we have to have a primary surplus of 4.5% of GDP and a growth rate of about 2.5%. As a country, we have already achieved the largest structural primary surplus in Europe. But there is no point in achieving a fiscal surplus in the numerator of the fraction and losing the GDP growth rate in the denominator of the fraction, which expresses the relationship of debt to GDP. This is what we are saying to our partners.
JOURNALIST: Don’t they understand that the economy is not just numbers?
E. VENIZELOS: There is always the psychological and political parameter in these equations. What is important is that the real economy start up again, that social cohesion be protected, and that democratic institutions continue to function smoothly. If our institutional collocutors can understand this overall approach, all the issues can be resolved easily. The debt is projected as sustainable through its overall duration and the total cost of servicing it. Thus, there ceases to be a fiscal shortfall on a yearly basis – to the extent that this concerns servicing of the debt and not primary management, while moving back the expiration dates of bonds and loans, in combination with some further reduction of the already low interest rates, drastically reduces the funding needs for the critical period.
JOURNALIST: So you agree that a new “haircut” is out of the question?
E. VENIZELOS: Internationally, very few private individuals currently have Greek state bonds in their hands, and those few bonds are in fact governed by English law. That’s how we achieved the private sector involvement (PSI). But the Greek debt has been radically restructured. It is principally a debt to the eurozone. So we won’t have a repeat of PSI, which, after all, was voluntary, through the clauses for collective action of creditors. But there has already been a supplementary buyback of new bonds. So the issue isn’t the “haircut” on the capital, but the right combination of all the parameters I set out above. This can be done relatively easily, as long as we don’t have the wrong discussion in the wrong way.
JOURNALIST: But the debt shot up to €323 billion …
E. VENIZELOS: That was calculated at the outset, in the major agreement of February 2012. The critical question is, where would the debt be today if we hadn’t achieved what we did with the PSI and the decisions made mainly in February 2012 and supplemented in November 2012. The deficits and the recession that are continuing due to the crisis – and now they are starting to stop – raise the debt, from which €130 billion has already been deducted. Moreover, the debt is restructured, and, as such, sustainable. I note that part of the debt (up to €50 billion) has gone for the recapitalization of the banks – that is, for the support of the deposits of Greek citizens – and the state will collect from the sale of the shares it now has in these banks. The amount taken in from the sale of these shares will be deducted from the debt.
JOURNALIST: Might all of this necessitate new measures and a new memorandum?
E. VENIZELOS: Our stance is very clear. The Greek economy and society – and Greek politics – do not need and cannot bear new, restrictive measures. What we are doing through such hard work and at such a cost is the only feasible and safe path out of the memorandum. But we need a comprehensive National Reconstruction Plan. Ours. But it is unfair and dangerous for some political forces to bear the weight of this responsible and difficult choice while others stand on our shoulders and play the hero, the good guy – play it sensitive in the name of a return to the bad aspects of the past that created this crisis. This is a treacherous, dead-end road. It is a cheap and tragic game played on the anxiety of our people.
JOURNALIST: Has the U.S. really asked us for facilitations for an intervention in Syria? If we are asked, through NATO, will Greece provide them?
E. VENIZELOS: The situation in Syria is tragic. A brutal civil war that has gone on for years is destroying a whole country, with thousands of innocent victims. The relationship between the majority and minorities is completely different in Syria from what it is in other countries. Now we are facing the use of chemical weapons; that is, a heinous crime condemned clearly, unequivocally, absolutely by the international community. This is what we are saying as a country that respects international legality. What country, what political force, what civilized human being refuses to condemn the use of chemical weapons, regardless of who the perpetrator is? Of course, we want to safeguard the main goal: the political process and the prospect for Geneva II. This is our position. Greece is proceeding with caution and consistency as a member state of the EU and NATO, and as a nation that has special ties to the critical region.
JOURNALIST: The opposition is calling you out and asking for the issue to be discussed in Parliament. What is your response?
E. VENIZELOS: Anyone in Greece who expresses easy views on foreign policy issues has not gone to the trouble to consider that our stance on Syria is synchronized with our stance on Egypt, which is a decisive country with regard to many, many issues – not just in the Middle East and North Africa, but also in the Eastern Mediterranean. Issues, that is, that concern us directly as a country. Consequently, we are making ongoing and intensive diplomatic contacts aimed at peace and stability in the Mediterranean, the Middle East, the Arab world, and at protecting our country’s strategic interests. My talks with Lady Ashton and my counterparts in many countries, from France to Iran, the positions we set down in the NATO and European procedures, and my contacts with the Patriarch of Antioch all serve this goal. In this framework we are doing a lot more than what we say publicly, and I am at the disposal of the political parties for briefings. It is odd that the opposition is rushing in to criticize the government without first asking to be briefed on all the information, the meetings, the assessments. That is, a briefing on matters that cannot be the subject of public debate in Parliament, in the midst of a crisis that is unfolding by the hour, in conditions of global politico-diplomatic activity.
JOURNALIST: What is the meaning of your visit to Cairo this coming Thursday?
E. VENIZELOS: That we want a stable, strong, peaceful and prosperous Egypt, with whom we have close ties of friendship, and which is decisive for all the pending issues in the wider region. That we support the Patriarchate of Alexandria, the Greek communities and Greek enterprises. That we want Greek-Egyptian relations in the Eastern Mediterranean to function in an exemplary manner within the framework of international law. That we are actively present in the region.
JOURNALIST: Tensions are expected in the fall. Teachers, doctors, civil servants are preparing for rallies. In your assessment, will the government get past this hurdle, or might it fall as the result of an “accident”?
E. VENIZELOS: There is in fact uncertainty in the public administration sector. The public servants have no reason to worry. There are strict guarantees for assessments and mechanisms for administrative and judicial protection. Wherever contradictions or injustices are identified, they will be remedied immediately. Mainly, it has be become clear that mobility does not mean dismissal. Unfortunately, the opposition is opportunistically cultivating fears and insecurities. We are doing what society is asking. A proper state in the service of the citizen and of growth.
JOURNALIST: Has the issue of auctions been resolved once and for all following your agreement with the prime minister?
E. VENIZELOS: The issue should never have arisen. What is in effect are the statements the Prime Minister and I made last Thursday.
JOURNALIST: Do you think the two-party government is functioning with greater cohesion than when it was a three-party government? Are the ministers more effective?
E. VENIZELOS: We are making a huge effort. My assessment is that, despite the weight of the problems, there is a perceptible improvement. But we need to deal with the administrative details in an ongoing manner, and we need to be dedicated to the strategic goal without ambivalence. There is and never was a “plan B”.
JOURNALIST: What are you trying to put across by inviting the two previous presidents and all of the previous high-ranking officials of the party to the 3 September anniversary?
E. VENIZELOS: The political/scientific conference we are organizing on the occasion of the 3 September anniversary sends a number of clear messages: rallying and unity of the party, historical self-knowledge, awareness of the economic and social reality, the ability to put forward comprehensive proposals for the future, respect for the people of the wider center-left of responsibility.
September 1, 2013