Mr. President, ladies and gentlemen, dear friends, I am pleased to have the opportunity to welcome you to the Foreign Ministry, to the amphitheatre that bears the name of the late Giannos Kranidiotis, a friend, a comrade, who bound his course to the country’s European policy, in close cooperation with Theodoros Pangalos, and contributed greatly not only to the success of many previous Greek Presidencies, but also to the major goal of the accession of the Republic of Cyprus to the European Union.
I am also pleased to be participating in another EKEME conference. I am truly an old and faithful friend of the institution itself, as well as of the people who have persevered in supporting and developing it for many years, like the current President, my dear friend and colleague, Nikos Frangakis.
And I am pleased to see in this hall people to whom I am linked through my various activities: political, scientific. I am particularly pleased at the presence of the Greek European Commissioner, Maria Damanaki, with whom we are working very closely ahead of the Greek EU Presidency in the first half of 2014.
Ladies and gentlemen, the first six months of 2014 are very promising; they are full of opportunities as well as challenges. But it is not just that. They are also the six months during which we aspire to the manifestation, within Greece’s real economy and the day-to-day lives of Greek citizens, the first signs of a change that – after 4 years of hard sacrifices, after 6 years of ongoing recession – Greek society is right in expecting.
The fiscal, growth and social targets for these six months really are extremely ambitious. But more than ambitious, they are a vital necessity for our country, which is functioning as a real laboratory in which the tolerance and perspective of the Eurozone – of the European Union as a whole, and of the European endeavor – are being tested.
The goal is for us to pass from long-term, cumulative recession to positive growth rates that are perceptible – to the naked eye, if possible – though necessarily small at first. Fiscally, we are already in conditions of structural primary surplus, impressively high – the highest in the Eurozone and the EU.
Our cyclically adjusted primary deficit is now a surplus. Taken together with the once-off measures that must be deducted, Greece is already at the impressively high level of a structural primary surplus of 5% of GDP. But, of course, the target of the budget, which has already been submitted in draft form and is being debated as of today, is for us to achieve a nominal fiscal surplus, which will help us to slow the geometrical growth of the public debt without – naturally – negatively impacting the denominator, GDP itself. Because it is in the denominator that all the results are judged in the end: fiscal, growth, social and political results.
So the first six months of 2014 are the six months of the Greek Presidency, and at the same time they are the first six months of our exit from the crisis. The beginning of the exit. Not the end, but the beginning. This, too, is very important.
On the other hand, we all know that these six months may be shorter, in a sense, for our Presidency, because the European Parliament will be shutting down earlier due to the run-up to the European elections, on the way to the new composition of the European Parliament, on the way to the new composition of the European Commission and the process of the election of a new President of the Commission.
As you can see, this is directly linked to the need – in the run-up to the elections, in all European societies, and with the help of all the European political parties, and thus all the national parties that make up the European political parties – for a new narrative to be drawn up for Europe. A narrative that restores the historical characteristics of Europe as a continent and the original aspirations of the European unification endeavor.
Such a new narrative for Europe – a narrative that, to a certain degree, the Greek Presidency is being called upon to handle – must return to the basics. It must necessarily speak again of the importance of politics, of re-politicizing the great debate on the perspective of European integration, and thus we must again speak of democracy, the need to re-establish the European social state on healthy fiscal foundations, bearing in mind the demographics of European societies.
But we also need to talk again about other things: a voice for everyone, tolerance, resistance to any kind of xenophobic or racist outlook.
Only in this way can we talk again of the prerequisites for a new, effective competitiveness of the European economy. The European Union, which has an economic foundation that is unquestionable on the level of both the real and financial economy, also takes on political characteristics. So this is an opportunity for us to talk again about the foreign policy and the security and defence policy of the European Union; about the common Euroatlantic destiny or, at the least, perspective.
But all of this presupposes something very simple and vital that we have to name, despite its being self-evident. It presupposes other levels of own resources, another perception of the EU budget, another perception of the redistribution mechanisms.
To a very great extent, the priorities of the Greek Presidency are dictated by the needs and imperatives of the European Union itself.
Can we have any other priority than growth? As tedious and trite as that sounds, it is the hope and perspective not just of the countries of the European south, which are in crisis, but of all European societies.
Can we talk about growth that happens spontaneously? Growth without credit? Thus, we need a new outlook on the potential to support growth initiatives; first and foremost, growth initiatives from private sector entrepreneurship and investments.
And of course we cannot talk about growth that does not create jobs – we are always talking about the fear of this type of growth. So we are talking about jobs and safeguarding the social dimension of the European Union, which, despite all the big and easy talk, has of course been hit hard, and therefore we must again discuss the conditions we need in order to safeguard the social dimension.
Can we manage a European Presidency, even of reduced duration (because there are now important permanent presidencies, like the permanent presidency of the European Council, the permanent presidency of the Foreign Affairs Council, the permanent presidency of the Eurogroup), without admitting that for the Eurozone, as well as for the EU-28, the integration of economic governance institutions is a vital necessity?
And we’re not just talking about the Banking Union, or a single supervisory mechanism, or a single bank bailout mechanism. We are talking about a single mechanism for guaranteeing deposits, so that we can avoid this reverse dumping that is carried out through interest rates. This provocative inequality that exists between member states: some banks offering very low interest rates and others very high, non-competitive rates. The cost of money and the cost of energy are the two greatest internal inequalities that are perpetuating the disparities that exist within the Eurozone and the European Union.
And, naturally, after the tragic event we saw in Lampedusa, can we have a European presidency that does not deal with borders, with movement, with migration, with the need for a comprehensive migration policy, with the European Union intervening at the source of the problem, and with the remedying of the flagrant regulatory inequalities that exist on this issue amongst the member states?
And can a country like Greece not but have a horizontal priority that runs through everything? This is obviously a comprehensive maritime policy – and here we are very close to the competencies and initiatives of Commissioner Damanaki – a horizontal, comprehensive maritime policy, whatever that might mean: A policy for growth, for energy, for fisheries, for maritime zones. And this is the point of contact with the Presidency in the second half of 2014: the Italian Presidency. We had the opportunity to agree with the Italian government, during my recent visit to Rome, on the cooperation and natural succession of the two presidencies, so that we can put together a Mediterranean Year in 2014, pointing up this Mediterranean dimension – first and foremost the purely European community dimension, beyond the fora working on this issue with greater or lesser success.
Promotion of enlargement – the goal of the accession of the Western Balkans, because these accession courses are on track – is not our stated priority. We hope to see Serbia’s accession negotiations with the European Union start in the early weeks of the Greek Presidency.
Just as important is the fact that our six months will see developments in very many member states: We are awaiting the formation of the new German government, the completion of procedures in Austria, the opening or closing of election cycles in other members states.
So in the European Union, as well as in the Eurozone, we are in reality just now taking stock of the crisis, and it is now that we must see what this entity’s course is following the crisis, which laid bare the major structural problems that existed from the Union’s birth. Structural problems that, as we all know, are due to discrepancies in the degrees of integration, between the level of monetary policy and all the other levels; due, that is, to the major political deficits. But time had to pass before we saw this or, rather, admitted it, because the European political family spent a great deal of time treating Greece as a scapegoat to be blamed for the whole crisis, while now it is becoming clear that the crisis was very broad, was very deep, was structural in nature.
Greece, with the absolute value of its sovereign debt, is a very small problem, if one bears in mind the absolute values of the sovereign debts of the large European countries that make up the core of the Eurozone, given that three countries alone – the three largest countries – have a total sovereign debt of over €7 trillion, so what systemic impact can a sovereign debt on the order of €320-€350 billion have?
We are now being called upon to realise how great a distance there is between the institutional description of the European Union – according to primary law, according to the treaties – and the Eurozone, on the one hand, and the political and regulatory reality, on the other. What is the case on the level of the Eurogroup is not the case in any other Council configuration. Neither the European Parliament nor the European Commission can realize this if they have not experienced it. Because naturally there is no rule in effect, no perception with regard to institutional equality, no mindset that is linked to the so-called social dimension, nor even with the intergovernmental dimension, of course.
Because the intergovernmental dimension is based to a very great extent on the institutional equality and the sovereignty of member states. Here, we are talking about something completely different. There are very few governments who maintain the right to decide. This government may, in the end, just be one government, and all the others, one way or another, are obliged to fall into step, to implement what is agreed on under the pressure of power correlations and a state of affairs that is always menacing. This is a reality that has very little to do with the lexicon, the notions, the institutional narrative of European integration.
And the fact alone that the IMF is established in the heart of the Eurozone, the fact alone that the troika exists as an institutional construct that, of course, leads automatically to the institutional downgrading of the European Commission’s role and, in the end, the roles of all the institutions organs, suffices to bear out what I am saying.
Yes, there is European solidarity and Eurozone solidarity, but the political, fiscal and institutional terms – in the very substance of Democracy – are very, very tough. I repeat, because I experienced this first hand, that there was no, and is no, Plan B, but Plan A is very, very tough and inequitable.
I am not talking about the huge, unprecedented €250-billion loan – inconceivable for collocutors outside the European Union – I don’t mean the equally huge haircut, through private sector involvement (PSI), to the nominal value of the Greek sovereign debt, which is the biggest write-off in history. These are truly impressive things. I’m not talking about the recapitalization of the banks that Greece has achieved, while other countries were led, through bail-in, into other ordeals. Cyprus has experienced the other version.
What I’m talking about, though, is what we are experiencing: unemployment, cumulative recession, the political, democratic and social cost that I can attest to personally and politically – how cruel it is to have to pay this cost. But of course it is incomparably worse to be a simple citizen suffering the sacrifices and repercussions of this whole process.
And, of course, the history of the democratic institutions comes in here as well. We – my party, I, personally – travelled a solitary path for many months, persisting in pointing up the dangers to democracy and its institutions, the danger to social cohesion, the danger to European values.
And the blood of innocents had to be shed for it to be widely realised that we have a Greece that is not just a fiscal laboratory, but also a laboratory for testing democratic institutions. Many years have gone by since 1984, when Dimitrios Evrygenis presented the first report on racism and xenophobia to the European Parliament.
But now we have the problem in Greece in its most extreme form, and no one can be indifferent to this in the six months leading up to the election of the new European Parliament, under the pressure not, of course, primarily of Nazi ideas, but of the diverse Eurosceptical approaches that are altering both national and pan-European correlations.
The criminal, the murderer, the Nazi cannot hide behind Euroscepticism. Nor can the acceptance of violence hide behind the economic crisis, because there is no such historical determinism. Following the crisis in 1929, the U.S. elected President Roosevelt and the New Deal; Germany, Italy and many countries in Central Europe voted for fascism, Nazism at that time, leading the continent to war.
It is vital that all the political powers realize the meaning of constitutional arch, democratic solidarity, single-front struggle to defend democracy and the rule of law from the living threat of Nazism. So now, the worst that the next Greek Presidency – or, rather, Greece as the country assuming the rotating presidency – might expect is the recycling of uncertainty.
Given that in the past there was a major debate about the technical implementation errors made by the IMF and the troika with regard to the notorious multipliers, I must tell you, in my capacity as former Finance Minister, that there is no worse negative multiplier than the criminal debate over the Grexit, and that the perpetuation of any uncertainty through the wrong discussions carried out at the wrong time and in the wrong manner is, in the end, the repetition of a “mistake.”
We are talking about the Greek Presidency and its priorities. Right now, the public sphere is in my opinion shouldering an unwieldy debate on the fiscal gap, the funding gap, the sustainability of the debt – a debate that is disorganized and, thus, leads nowhere.
We need clear, honest political debate with our partners, on the political level. I realize that, along the way, the nature of the troika has changed drastically. They are no longer just the representatives of three institutions. At the same time they are the representatives of the European governments, the Eurozone governments – and mainly those governments with a deciding word on things.
But on a political level, with technical proficiency, without ignoring any technical element, we have to shape a clear and effective framework. The debt is completely sustainable if we take into account the parameters that concern the fiscal results and growth rates. But aren’t the atmosphere, political acknowledgement, certainty and optimism also parameters of the growth rate?
The other discussions taking place are utterly irresponsible; discussions of the new haircut, OSI and, correspondingly, PSI. Because all of these are based on political prerequisites, and because I often hear the argument used by every European citizen – the German and everyone else who has a right to know what he has paid for so far and what he will pay – I want to say outright that the German taxpayer has paid nothing for the funding of the Greek crisis.
The first version of the inter-state loan was concluded between the Hellenic Republic and the German Investment Bank KfW, guaranteed by the German public sector, and that loan is being serviced, with interest.
The second loan, the big loan, is the loan concluded between the EFSF and the Hellenic Republic. The member states participate as EFSF as shareholders and guarantors. This loan is also being serviced, with interest, despite the fact, of course, that an impressive restructuring of the debt has been carried out, with much greater duration, with much better maturity, with much better interest rates.
But it is a loan that links the lender and the borrower in a natural relationship: the lender does not lose. And this loan, too, is being serviced. So there are many technical solutions, provided there is a stable political framework and clear and honest political explanation, without any slack given, without any favours.
We can discuss a lot of things about the interest rates, the maturities, the movement of critical dates, the profits being made by the Hellenic Republic bond portfolios maintained by the European Central Bank and the European System of Central Banks, with the participation of the member states’ Central Banks. We can talk about the ensured, risk-free presence we have – in any case – in markets, through treasury bonds.
But mainly we have to talk about the real economy. We have to talk about liquidity, about what I mentioned regarding the differences in interest rates and energy costs, about the Structural Funds, about the European Social Fund, about curbing unemployment, about support for entrepreneurship, because that is also how we support new jobs.
So when the government of the two parties, the Prime Minister and I, as President of Pasok and Deputy Prime Minister, say, “no new measures, no new fiscal measures, no perpetuation of the recession and unemployment,” we mean it. Society can’t take it, the political system can’t take, no one can take it. Europe, as an historical, social and developmental entity, can’t take it.
Of course, at the same time, we say, “yes to structural changes, yes to the need for there to be a new, truly European state in the service of growth and the general interest.” Yes to structural changes means no to old mindsets, no to all types of special interest groups, no to the ambivalence that keeps us from being effective.
But there is resistance. Ideological resistance, political resistance, social resistance. It is an ongoing, tough struggle. And all of this presupposes an element that we tend to forget: National unity, the basic ability to engage in dialogue and reach consensus. One cannot put the fight against Golden Dawn and Nazism on the same level with the struggle against the memorandum policy, which is the government’s policy, the policy that was chosen by the Greek people in May and June 2012. Because this government has been formed through the votes of and on a mandate from the Greek people.
And thus will we move ahead with the drawing up of the budget, the new Midterm Fiscal Adaptation Programme. This is how we will move ahead with regard to the tax system, the taxation of real estate, with the measures for curbing unemployment, with the supporting of the weakest social groups, and mainly with our growth-oriented initiatives. This is the core of the National Reconstruction Plan.
And this coincides to a great extent with the six months of the Greek Presidency. We are sitting for exams again – taking exams constantly. But the difficult examinations we are taking are not the management of a Presidency of the Council of the European Union. They are the European nature of Greece and, you will allow me to say, the European nature of Europe.
That is why it is the great demand and the great need. The European Union – that is, the peoples of Europe, the electoral bodies, the societies. And, of course, then the Parliaments and governments, too, have to understand that we need a “European” European Union.
This is neither tautology nor paradox. It is the core of the problem of European integration. The entity known as the European Union – and chiefly the entity known as the Eurozone – has to rediscover its European nature. We have the right and the duty to make this the main and number one issue, in our capacity as a member state, in our capacity as the country that is the laboratory of the great test of the crisis, and in our additional, rotating, six-month capacity as the next European Presidency.
October 10, 2013