Greek Finance Minister on Berlin Tour
Greece’s finance minister tells Handelsblatt he
came to Berlin with an “impressive list” of the reforms that Athens has
undertaken since nearly tumbling out of the euro last July.
read
Pensions, promises and trust. Source: Reuters
Greece’s finance minister, Euclid Tsakalotos,
was in Berlin this week for talks with German Finance Minister Wolfgang
Schäuble and other top officials.
The tour, which also includes meetings with
other euro zone finance ministers, came at a critical time for Greece, with
some in Germany fearing the country is once again slipping back on its promises
to reform its economy and government in exchange for a third bailout last
summer.
Relations between Mr. Tsakalotos and Mr.
Schäuble have warmed, despite the fact that the German finance minister was
among those suggesting last summer that the best option for Greece might be to
exit the 19-nation euro zone. The European Union and Greece eventually sorted
out a tough deal that keeps Greece in the currency bloc, at least for now.
Mr. Tsakalotos sat down with Handelsblatt
following his meeting with Mr. Schäuble.
Handelsblatt:
Mr. Tsakalotos, Wolfgang Schäuble is still very unpopular in Greece because he
was promoting a Grexit last summer. How was the meeting?
Euclid Tsakalotos: The meeting went well, it was
very constructive. I gave him a paper which outlined every single reform that
we have done since July. It is an impressive list.
Was Mr. Schäuble
impressed too?
I found sympathetic ears. My feeling in all the
meetings with my colleagues during this week was that I was listening to people
who are looking for a solution and not trying to create problems. They might
not always agree but I never got the impression that the people are fed up with
the Greek government. I felt that all six finance minister accept that we have
made a lot of reforms. We have credibility.
But you’re late
again. The first review of the program should have been completed in fall 2015.
If you see the number of measures that we have
passed since July, it is very difficult to say that we are late. People who say
Greeks are dragging their feet would be very surprised with that list.
The institutions
were surprised by your pension reform. They are not satisfied.
There should be some give and take. We don’t
want to go back on our promises. The MoU says that we have to make one percent
savings of GDP on pensions, this means €1.8 billion. But it doesn’t say exactly
how it has to be done. We made savings already of €1.1 billion. So the question
is where the €700 million should come from.
Greece has one
of the most expensive pension systems in the European Union. Why is it so
difficult to find savings of another €700 million?
For two reasons: Current pensioners have already
had eleven successive reductions in their pensions. Secondly for social
reasons: Pensions in Greece at the moment are not just about pensioners. You
could have a grandmother who has a €600 pension and she is helping her
unemployed son and her granddaughter who is trying to get into university. That
is really not the job of the pension system. That is the job of unemployment
insurance, or of the education system. So what I explained to Wolfgang and my
other colleagues is: While we are working on these issues, we can’t hit the
current level of main pensions.
An important
issue especially for Mr. Schäuble is to set up a privatization fund. When will
it be completed?
It’s defined in the Memorandum. It has to be up
and running in the second quarter of 2016. One of the things we have learned in
our first government is, the more advice you get, the easier negotiations
become. So we are using the technical assistance of the European Union in a
much more constructive way. Because by the time the political negotiations
start, all the spadework has been done. For the privatization fund, we have
gotten a lot of advice from France. And we are speaking with the Germans too.
Do you want to
get rid of the IMF?
[Finnish Finance Minister] Alexander Stubb,
[Eurogroup Chief] Jeroen Dijsselbloem and Wolfgang Schäuble made it quite clear
that the IMF is a sine qua non. And they don’t mean just in terms of technical
assistance but active involvement in the financial package.
But Greek Prime
Minister Alexis Tsipras said a few weeks ago that the program could be
continued without the IMF?
The prime minister was expressing a frustration
that sometimes the IMF set the hurdle to pass the review so high. They were
pushing us further than is politically feasible. Because there is some reform
fatigue in all societies that carry out such reforms. People want to see the
results of the reforms in their lives before beginning the next round of
reforms. But the IMF is also pressurizing countries, like Germany on debt
relief, to do more than they are willing to do. So, on both sides it seems to
be difficult. But the involvement of the IMF is agreed. This is our commitment.
When will the
first review of the program be completed?
We say it could be done in days. Jeroen
Dijsselbloem said earlier this week that it will take months. But, between
months and days there are weeks. I think this is a good guess. I have a sense
of goodwill from everybody. So I think we could hammer out a deal maybe in four
weeks.
And when you
have a deal, will you try to talk about debt relief?
Timing is most important for us: the first step
was the recapitalization of the banks, the second the review and then debt
relief. If that happens in a timely manner, then investment will begin, people
will start consuming, savers will start putting money back into the banking
system, growth will be easier and we will be able to reach our fiscal targets.
If it drags on, we will return to the vicious circle when you ask us for more
measures.
What kind of
debt relief do you want to see: a real haircut, longer maturities, or a grace
period?
The goal is that investors believe the euro zone
and the institutions find a reliable solution for the debt problem. It must be
clear that Greece has turned the page, and that debt is easier to service. If
we delay these decisions until Easter 2017, then investors will not return
before Easter 2017. Once we have reached a solution, investors and growth will
return to Greece.
When do you
think Greece can return to the financial markets?
Well, it doesn’t only depend on Greece but also
on the markets. But if the timetables are kept, we can think about returning at
the end of this year. It’s not a certainty, but a reasonable estimate.
We’d like to
turn to the refugee crisis. Is there an agreement between Greece and Germany
over how solve the problem?
This isn’t so much a question for the finance
minister. What I discussed with Mr. Schäuble and the others are the fiscal
implications of the refugee crisis. I, for instance, think it’s not a good idea
to take money out of the European structural funds, because these funds are
meant to increase convergence in Europe. I think new money will be needed. And
I think Wolfgang Schäuble has some ideas about how to get that money.
Is the refugee
crisis a European or a German problem?
If we just see the refugee crisis as a national
problem for some countries, I fear this might become a precedent for the E.U.
as a whole. If we don’t play it right, the E.U. will be in danger not from a
Grexit and a Brexit, but from the refugee crisis.
There are people
in Germany who say that Greece is now in a much better position in the
negotiations about its bailout program, because Germany needs your cooperation
on refugees…
I think Greece acted with a lot of solidarity in
this crisis. And I think in Greece, nobody wants to go back to last summer.
Last summer, the
relationship between the Greek government and the German government seemed to
reach an all-time low. Do you think it has improved since?
I think the relationship is improving. Trust is
a funny kind of thing, that’s what I teach my students at university. The more
tomatoes you eat, the less tomatoes you have. But with trust it’s just the
opposite: The more you trust each other, the more trust can be used. And
because of that, the six meetings I had this week went better than I had
expected.
Even the meeting
with Mr. Schäuble?
Yes, there were headlines before, saying, “he
will be grilled.” But it wasn’t like that at all.
