“We are now a country growing at a much faster rate than the eurozone average. We are consistently recording primary surpluses, our debt is falling at the fastest rate among OECD countries, we have restored Greece’s overall credibility and we are attracting significant inflows of foreign direct investment.
All this is reflected in the way the markets view us. At a time when global bond markets are in turmoil, Greece is borrowing at a lower interest rate than four of the seven G7 countries. I do not think many people would have believed a few years ago that this would be possible,” Prime Minister Kyriakos Mitsotakis tells the Wall Street Journal and journalist Gordon Fairclough in an interview.
“At the same time, we are generating healthy primary surpluses that allow us to offer targeted support measures to help the Greek people cope with the cost-of-living crisis. The cost-of-living crisis is very real; it is Greeks’ biggest concern,” the prime minister adds, stressing that there is no magic solution and that Greece is not imposing austerity measures, as many European countries are, and is offering targeted income-support measures.
The prime minister goes on to say that his proposal to the Greek people for the 2027 election is “a kind of new contract, under which we will set a target of growing at least twice as fast as the rest of the eurozone. That is how we can further reduce unemployment, raise wages and increase disposable income. Of course, this growth must be based on investment.”
Kyriakos Mitsotakis also stresses that Greeks endured great hardship during the crisis. “And I believe that this pain was made worse to some extent by the fact that, in the midst of the crisis, we elected a populist radical-left government that allied itself with the far right and promised people magic solutions to their problems.
The end result was that we came close to total disaster. So we unnecessarily prolonged the crisis by four years,” he says, noting that this is why Greeks are wary. “But the new contract must be based first and foremost on trust. Trust is built by focusing on accountability and ensuring that you can actually deliver what you promise the public,” he says.
“We are performing exceptionally well at the macroeconomic level. I want that to translate into a better life for ordinary citizens,” the prime minister adds.
Finally, addressing the choice facing voters in the upcoming election, the prime minister says: “I believe the real choice at the next election is between realistic hope and experimentation, particularly at a time when stability is essential.”
Here is the full interview with Prime Minister Kyriakos Mitsotakis by the Wall Street Journal and journalist Gordon Fairclough:
“Gordon Fairclough: How would you say Greece has changed since the economic crisis?
Kyriakos Mitsotakis: When we first took office in 2019, Greece was still struggling after a decade of harsh austerity. We lost 25% of our GDP and, frankly, there was not much hope for Greece; it was seen as a country where it was almost impossible to implement reforms. But I would say that, seven and a half years later, if you look at the overall progress we have made, what we have achieved is truly remarkable.
We are now a country growing at a much faster rate than the eurozone average. We are consistently recording primary surpluses, our debt is falling at the fastest rate among OECD countries, we have restored Greece’s overall credibility and we are attracting significant inflows of foreign direct investment. All this is reflected in the way the markets view us.
At a time when global bond markets are in turmoil, Greece is borrowing at a lower interest rate than four of the seven G7 countries. I do not think many people would have believed a few years ago that this would be possible.
At the same time, we are generating healthy primary surpluses that allow us to offer targeted support measures to help the Greek people cope with the cost-of-living crisis. The cost-of-living crisis is very real; it is Greeks’ biggest concern.
There is no magic solution. However, at least we are in a position not to impose austerity measures — many European countries are being forced to do so — and to offer targeted income-support measures, while continuing to focus on reducing the tax burden on Greek businesses and citizens.
Gordon Fairclough: So you have got the debt issue under control, but wages remain quite low and GDP has not returned to pre-crisis levels. What do you need to do to boost growth?
Kyriakos Mitsotakis: You are right to point out that wages remain relatively low, but they are significantly higher than they were seven years ago. And if you look at the average wage, you will see that it has also risen significantly. Of course, the cost-of-living crisis and the general rise in the prices of goods have obscured much of that increase.
So, when I look at my goals for the coming years — and we have an election in 2027 — what I am proposing to the Greek people is a kind of new contract, under which we will set a target of growing at least twice as fast as the rest of the eurozone. That is how we can further reduce unemployment, raise wages and increase disposable income. Of course, this growth must be based on investment.
Gordon Fairclough: Are you satisfied with the kind of investment you are attracting? Is the portfolio expanding beyond real estate and tourism?
Kyriakos Mitsotakis: I think the point you are making is very important. Our economy does not rely on just one sector. Tourism, of course, is very important. We welcome more than 35 million visitors every year. They find a very beautiful country offering excellent services at prices that, in my view, remain very competitive.
But it is not just about tourism and real estate. It is about renewable energy, the agrifood sector, pharmaceuticals and logistics. Shipping is a sector that, as you know, is of great interest not only to Greece but also to foreign investors. And, of course, there is the technology sector.
Gordon Fairclough: How would you say the social contract between Greek citizens and the state has changed since the crisis?
Kyriakos Mitsotakis: Greeks endured great hardship during the crisis. And I believe that this pain was made worse to some extent by the fact that, in the midst of the crisis, we elected a populist radical-left government that allied itself with the far right and promised people magic solutions to their problems. The end result was that we came close to total disaster. So we unnecessarily prolonged the crisis by four years.
Greeks are therefore wary. But the new contract must be based first and foremost on trust. Trust is built by focusing on accountability and ensuring that you can actually deliver what you promise the public.
So, when I look at the economy, for example, what is my main challenge? We are performing exceptionally well at the macroeconomic level. I want that to translate into a better life for ordinary citizens. Have we reached that point yet? The honest answer is no; we are not where I want us to be.
But if I talk only about the macroeconomy, if I talk only about interest-rate spreads and the reports of rating agencies, I am overlooking the other side of the equation. So we need to recognise that citizens are struggling, but we also need to ensure that what we tell them is genuinely realistic. The temptation to overpromise and then underdeliver is always there, but that is ultimately what breaks the social contract and destroys trust between the government and the public.
Gordon Fairclough: I have to say that, from my conversations here with ordinary Greek citizens, I get the impression that the average Greek knows much more about budgets, deficits and fiscal policy than, say, the average American.
Kyriakos Mitsotakis: Yes, because we have lived through the pain. We have learned our lesson, and I believe we will never return to a period when we borrow beyond our means. That is my personal commitment. I am proud that we are reducing our debt so quickly, because the next generation — including my own children’s generation — will inherit a smaller debt burden than the one I inherited.
If that means that in some cases I have to make painful decisions or tell people, “I understand the difficulties you are facing, I understand that you are asking for more, but if I met those demands now, I would create greater difficulties in the future,” I have to be completely honest and explain that to them.
Gordon Fairclough: In your view, what lessons can other European countries learn from Greece’s experience?
Kyriakos Mitsotakis: As you know, every country is different. But if I look back at what we have achieved, I would say the first lesson is that reforms work. The difficult reforms you pursue as a politician do produce tangible results. However, you have to go through a period in which you have to manage the political cost. Ultimately, you have to deliver results, because if you do not, people will look for another alternative.
I believe the real choice at the next election is between realistic hope and experimentation, particularly at a time when stability is essential.
Gordon Fairclough: So what advice would you give your counterparts in France?
Kyriakos Mitsotakis: I do not like giving advice. I have excellent relations with France, as well as a personal relationship with the French President, Emmanuel Macron. However, I believe the next government will, at some point, have to reduce the deficit. Not because the European Union is asking for it, but because markets are unforgiving towards countries that fail to meet their fiscal targets.
Gordon Fairclough: And how do you secure public support for such a policy?
Kyriakos Mitsotakis: Implementing austerity measures is never easy. Fortunately, we have left that period behind us. But if you have to implement austerity measures, make sure you do so at the beginning of your term. That is the only advice I could give, because these measures deliver results, but they have painful consequences in the short term.
Gordon Fairclough: You mentioned energy prices and the cost of living. Markets are generally in turmoil. Are you worried that all these headwinds could knock Greece off its current course?
Kyriakos Mitsotakis: No, they will not knock us off course, but they will make things more difficult. I believe Greeks understand that this is a crisis we did not cause. There is a war. I think even the US President and Vice-President acknowledged that the war had an impact, to some extent, on the election results last week.
So, yes, it will make things more difficult, because inflation carries a high political cost for those in government. But it will not knock us off course. Fiscal balance will be maintained. Of course, if things deteriorate again — that is not my forecast, but who knows what might happen? — the situation will become more complicated for everyone.”