Giorgos Stathakis, Greece’s Minister of Economy, Infrastructure, Shipping and Tourism, spoke to La Tribune about his country’s negotiations with its creditors.
The former economics professor was appointed to the cabinet of the Syriza government that came to power in Athens in January 2015.
Do you understand the decision of the creditors and the IMF to turn down the Greek proposal of 22 June?
No, I do not understand it. Our proposal was based on a more balanced approach to budgetary consolidation, with greater emphasis on social justice. That’s why we wanted to take a larger contribution from the rich and the big businesses that were spared by austerity. The IMF and our European partners insisted that we reduce pensions by a further 10%, when they have already been cut by 40% since 2010.
Do you see this as an attempt to humiliate the Greek government?
I don’t know if it is an attempt at humiliation, but Greece is absolutely committed to finding an agreement. Our proposal this week showed that. But we have to find a rational solution.
Does this “rationality” necessarily include a restructuring of the Greek public debt?
Yes, for us that is one of the keys to an agreement. We have to find a solution for the debt held by the ECB and the IMF over the period 2015-2018, in order to reduce the primary surpluses needed and encourage an economic recovery. In the longer term, when we have to start paying back the European countries from 2022, the sums will not be affordable: €20 billion in 2022, €28 billion in 2023… So we have to strike a deal to make these payments more realistic.
Will you be able to pay back the IMF on 30 June?
We will find a way. We paid the IMF in April and May.
Ms Lagarde was very clear that there would be no “grace period” for non-payment…
I am not impressed by that sort of language. But I think the ball is now in the court of our European partners.
How do you respond to those that accuse you of wasting five months on useless negotiations?
They say that we should have accepted the fifth evaluation of the Troika in February. But for us that was impossible. So we tried to find a more balanced approach, which the leaders accepted on 20 February. The task was then to negotiate the terms of this new approach.
Many also accuse you of not having made any real reforms since your arrival in office.
We have made more reforms in five months than previous governments did in five years. We have established a ministry specifically to deal with corruption, which is carrying out serious work on tax evasion. We have also signed an agreement with Switzerland on this issue. We are doing the groundwork in other domains, including the education system, but reforms to the civil service must respect the political independence of the public institutions. And we are also thinking about how we can simplify the administration. So we do have a real reform policy, based on our aim of putting an end to political cronyism. And there will be more reforms if we reach an agreement…
The Greek economy is suffering from a severe shortage of cash. Will an agreement be able to bring back economic growth, in spite of the seemingly inevitable austerity measures?
In our proposal, we tried to avoid austerity by cutting expenditure. Our idea is to make the budgetary adjustment as moderate and as fair as possible. As a result, I think we can count on positive growth as early as 2015, with the economy getting even stronger in 2016. We see a strong demand for investment in tourism, the extractive industries, services and construction. Greece has potential for economic growth, but we need an agreement with our creditors.
The ECB will continue to provide liquidity to the Greek banks. Will this situation last as long as the negotiations are going on?
I trust in the ECB’s willingness to support the Greek banks throughout the negotiation period. Obviously, neither the Greeks nor the Europeans know what will happen if there is no agreement. As Mario Draghi said, we would be entering “uncharted waters”.
This interview also appeared in EURACTIV France.