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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. We have Kariako schmits attackers,

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Speaker 1: Prime Minister of Greece here with us. We've jumped straight

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Speaker 1: in a lot of movement on Ukraine this week. You've

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Speaker 1: had Trump saying stuff about it. You have various NATO

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Speaker 1: allies getting cross about the fighter jets and curtaining in

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Speaker 1: their territory and warning Russia about it. You even had

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Speaker 1: Germany coming forward and saying, let's use the one hundred

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Speaker 1: and forty billion dollar billion euro frozen assets to help Ukraine. Now,

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Speaker 1: you have always been a kind of champion of this

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Speaker 1: idea of having a common European fund for defense, and

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Speaker 1: you've always had pushback from the Germans on that. Do

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Speaker 1: you think now it stands the chance of going through?

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Speaker 2: Well, thanks for having me, John.

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Speaker 3: I've been advocating for quite some time about the need

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Speaker 3: to create some joint European borring facility to cover what

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Speaker 3: I consider the quintessential European public good, which is common

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Speaker 3: Youseuropean defense. And I do sense that there is much

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Speaker 3: more momentum now amongst my colleagues. Some of the countries

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Speaker 3: that were inherently against the idea of additional further joint

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Speaker 3: borrowing have changed their mind, and I'm pretty sure that

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Speaker 3: Germany will eventually also agree to this necessity. And we

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Speaker 3: need to make sure that this facility finances projects of

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Speaker 3: common interest. And I would put missile defense, drone defense

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Speaker 3: right up there in terms of our collective European priorities.

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Speaker 3: So I would expect some movement soon. We have two

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Speaker 3: European councils and hopefully we can make progress towards that direction.

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Speaker 1: Just looking at the economy at the moment, the Greek

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Speaker 1: economy has been doing very well, is no doubt you

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Speaker 1: will tell me. But in twenty twenty four you forecast

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Speaker 1: a deficit and then you ended up with a surplus,

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Speaker 1: and this year you're again forecasting a deficit. It's quite

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Speaker 1: close to the end of the year. I wondered if

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Speaker 1: now you're close enough to say this year you end

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Speaker 1: up with a surplus again.

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Speaker 3: For the more we've been having, we've been producing significant

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Speaker 3: primary surpluses, and I think it's quite possible that we

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Speaker 3: may have a real surplace again this year. This is

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Speaker 3: a foundation of our economic policy. We've suffered a lot

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Speaker 3: from not being fiscally disciplined. This is not going to

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Speaker 3: happen again. But I think the big success of our

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Speaker 3: policy is to ensure that the economy is growing at

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Speaker 3: the same time to create jobs. We've created five hundred

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Speaker 3: thousand jobs since I became Prime Minister, and the real

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Speaker 3: goal is to ensure that this collective wealth is spread equally.

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Speaker 3: So my focus now is to use whatever physical space

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Speaker 3: I can create through growth and tackling tax evasion to

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Speaker 3: cut taxes to the middle class. It's important for me

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Speaker 3: that this discussion is not just limited to the economists

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Speaker 3: saying good things about the economy. I want the average

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Speaker 3: Greek to really feel a tangible benefit from this girl story.

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Speaker 3: And starting January first, when these tax cuts will kick in,

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Speaker 3: they will see a real increase in their paychecks.

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Speaker 2: And this is very, very important to me.

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Speaker 1: It's kind of like the average Greek in a second,

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Speaker 1: you just mentioned fiscal discipline. I mean, you look at

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Speaker 1: the core of Europe. I sat down with Premiss Sanchez

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Speaker 1: to Spain the other day as well. Something dramatic has changed.

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Speaker 1: You know, Greece Spain, You're the country is growing really fast.

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Speaker 1: In the middle You've got countries in much greater trouble.

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Speaker 1: You look at France, you're growing clapping out over two percent.

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Speaker 1: They're struggling to get to half a percent of growth.

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Speaker 1: That death is ballooning, is it? We now in a

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Speaker 1: situation where you would worry about financial contagion from France.

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Speaker 3: This seemed inconceivable a few years ago. What I can

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Speaker 3: tell you is that eventually no one can beat the markets.

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Speaker 2: We know this.

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Speaker 3: Very well, and I do think that at some point

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Speaker 3: governments have to take difficult decision to put their fiscal

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Speaker 3: house in order. We've done that. Once you do it,

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Speaker 3: then you can enter into this virtures cycle where you

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Speaker 3: can actually grow the economy, you can cut taxes, you

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Speaker 3: can support income through targeted measures. We're there, but we

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Speaker 3: also went through very very difficult periods and very painful reforms.

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Speaker 3: So I do hope that the political situation in France

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Speaker 3: somehow stabilizes. It is important that the core of Europe,

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Speaker 3: you know, France, German, that these economies are doing well.

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Speaker 3: Look at I mean, we we will receive thirty six

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Speaker 3: million tourists this year. Our tourism industry is booming. But

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Speaker 3: if our core markets don't do well, we will also

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Speaker 3: at some point indirectly be affected.

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Speaker 1: You're famously polite man, and I know that Sheldon Freuder

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Speaker 1: is not a Greek word as a German one, but

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Speaker 1: there must be some element in Greece of looking at

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Speaker 1: these people who nearly push Greece out and thinking, well

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Speaker 1: things have changed.

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Speaker 2: Well, things have changed.

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Speaker 3: But at the end of the day, this is not

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Speaker 3: about you know, pointing fingers, or about saying that you

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Speaker 3: were wrong and we were right. It's about ensuring that

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Speaker 3: Europe collectively grows. I'm disappointed by the fact that when

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Speaker 3: I look at the drug report, we have not made

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Speaker 3: significant progress, and I think it's time that you know,

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Speaker 3: you know, in Europe, we were usually were too.

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Speaker 2: Of the council.

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Speaker 3: We were our European hat and we were our national hat.

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Speaker 3: And it seems to me that for some countries the

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Speaker 3: European hat seems to be shrinking. So we have to

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Speaker 3: look at the big picture. Some of the decisions that

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Speaker 3: we need to take require more funding. It's pretty clear,

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Speaker 3: and we need to put our European interest, not necessarily

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Speaker 3: ahead of our national interest, but to realize that some

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Speaker 3: difficult decisions need to be taken at the European level.

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Speaker 1: One of the areas where Europe has been pretty useless

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Speaker 1: at doing these things is banking, the banking union and

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Speaker 1: things like that. At least Unique Credits has built up

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Speaker 1: a stake in Alpha Bank, which you were famously much

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Speaker 1: more relaxed about than the Germans were they when they

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Speaker 1: built up one in Commerce Bank. Would you be prepared

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Speaker 1: if they were to take over Alpha Bank?

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Speaker 2: Would you be relaxed about that?

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Speaker 3: If we really mean what we say about creating skill

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Speaker 3: in banking union, we should be open to these types

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Speaker 3: of transactions. I see value when an important foreign bank

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Speaker 3: wants to acquire a stake in a Greek bank, it

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Speaker 3: means they believe in the potential of the Greek economy,

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Speaker 3: and it means that the bank could possibly do better.

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Speaker 3: I'm pushing my banks to extend more credit to mortgages,

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Speaker 3: to small medium sized enterprises. The stronger their balance sheet is,

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Speaker 3: the more likely it is that they will do so. Yes,

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Speaker 3: in principle, we are in favor of these transactions, and

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Speaker 3: I'm happy that Unit Credit has decided to look at

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Speaker 3: one of our Greek banks and take a significant stake.

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Speaker 1: Isn't that But as you said earlier, that's the kind

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Speaker 1: of problem with Europe at the moment. Most people are

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Speaker 1: taking these decisions on I suppose purely nationalist or that

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Speaker 1: kind of level. You look around Europe at the moment,

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Speaker 1: the ability to create common things like a banking union,

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Speaker 1: that's the real problem at the moment. Do you think

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Speaker 1: that is something coming from Brussels or from the national capital.

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Speaker 3: I think most of the important if you want to

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Speaker 3: understand what's happening in Brussels, look at the national capitals.

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Speaker 2: I think.

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Speaker 3: The Council has become more complicated in terms of taking decisions.

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Speaker 3: But on the other hand, past we took a momentum

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Speaker 3: decision when we had to address COVID is Ukraine, a

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Speaker 3: geopolitical COVID moment. I would argue to a certain extent, yes,

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Speaker 3: and I remember the COVID fund negotiations. There are a

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Speaker 3: lot of countries, including Germany, they said no until they

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Speaker 3: said yes. So when it comes to defense, which as

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Speaker 3: I said, is the ultimate European public good, I do

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Speaker 3: expect that we will be able to take important decisions

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Speaker 3: to target specific European projects, which would then again require

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Speaker 3: European collaboration.

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Speaker 1: You talked a bit earlier about the average Greek I

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Speaker 1: was looking at the numbers. Greek GDP has come soaring back,

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Speaker 1: but still roughly the same level in nominal terms as

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Speaker 1: it was before the crisis, a bit lower in real terms.

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Speaker 1: Is that still Greece has now been through that phase

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Speaker 1: and it's now the terms of looking forward to a

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Speaker 1: different form of Greece.

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Speaker 3: We have clearly turned the page. But as I said,

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Speaker 3: if we want to converge with Europe, we need to

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Speaker 3: grow faster than Europe. We've been doing this, but this

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Speaker 3: growth needs to be qualitatively different. We needs to focus

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Speaker 3: on investment, on innovation, on experts, on creating really valuable jobs.

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Speaker 3: And my main goal is to ensure that way wages increase,

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Speaker 3: that we have wage convergence with Europe, and that we

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Speaker 3: support disposable income at a time when all European economies

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Speaker 3: are faced with the cost of livid crisis. I mean,

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Speaker 3: and the only way to address this is to ensure

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Speaker 3: that we support disposable income. But we have to do

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Speaker 3: it in a fiscally sustainable way. That's what we have

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Speaker 3: done so far. We will continue doing it. I do

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Speaker 3: expect that next year we will again perform very well.

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Speaker 3: So I tell my fellow Greek citizens that I think

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Speaker 3: the best days are ahead of us, and that this

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Speaker 3: is a policy that will deliver long term benefits to them.

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Speaker 1: You have elections coming up in twenty twenty seven. The

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Speaker 1: polls at the moment, so you might have to go

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Speaker 1: into coalition with people you've won two terms. I think

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Speaker 1: you'll be the first person and to get a third term.

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Speaker 1: If you did, would you be prepared to go into coalition?

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Speaker 3: Elections are eighteen months ahead. Eighteen months out. We are

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Speaker 3: way ahead in the polls. Our goal is to win

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Speaker 3: an absolute majority. We've done it twice. There were people

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Speaker 3: doubting that we would succeed before the previous elections.

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Speaker 2: I think that if we deliver on.

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Speaker 3: Our commitments, and if the economy continues growing, if we

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Speaker 3: work hard to improve the National Health service, these are

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Speaker 3: the priorities I set out in twenty twenty three. We

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Speaker 3: have a reasonable chance to win an absolute majority. But

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Speaker 3: if the quick people decide otherwise, it's eventually we have

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Speaker 3: to respect their decision.

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Speaker 1: We will look forward to following you through that. Carre

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Speaker 1: chrismis te guess. Thank you very much for talking to Bloomberg.

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Speaker 2: Thank you, thank you John for having me