A friendly yet firm message from Pierre Moscovici
BRUSSELS – Only 40 days have passed since Pierre Moscovici took over as European economic and financial affairs commissioner but he has already played a vital role in helping Greece and the troika overcome a deadlock in their talks.
Moscovici is due to make an official visit to Athens on Monday and ahead of his trip he spoke to Kathimerini, expressing his support for the Greek political forces that favor a strong relationship with Europe.
You are going to be in Athens on Monday at a very important time for the EU agenda and the Greek program. Next week, the EU Council is to decide on the investment pact. This doesn’t really affect the lives of many EU citizens. What changes can they expect?
The results of the last elections were somehow worrying. I can understand that a young woman or man in Greece, where there is 50 percent unemployment, will wonder why they should be pro-European.
I understand those who say that Europe is only about fiscal consolidation, seen as austerity, and wonder what prospects there are. This is what this Commission is about. Our aim is to restore confidence in EU projects and to do what we need to show by actions and results that our preoccupation is jobs and growth, jobs and growth, growth and jobs. Investment here is the key factor. What explains the lack of growth or weak growth in Europe today is the lack or deficit of investment capital. When you look at the figures, investment in the eurozone is 20 percent lower than it was in 2008. It means that compared to our competitors like the US, we are at risk of becoming a kind of second division. We don’t want that, and that is the investment plan, an initiative of 315 billion euros that must be targeted for jobs and activities for the future. It has to be implemented fast and that is why this Commission is working so fast.
There are deflation pressures in Europe and countries with high debt like Greece are not going to be helped by this situation. What is your action plan for that?
First, I wouldn’t say that we are in a deflationary situation. This is not the analysis of the Commission. The Commission sees that we are in a low inflation situation but we expect inflation to go up slightly in the two years to come. Of course we are going to look at it, especially the impact on the evolution of the price of energy. I know that some countries are in negative territory as far as inflation is concerned and that is the result of the consolidation plans that we led in Greece. This is not the responsibility of the Commission, the main actor is the ECB but as far as I know Mr [Mario] Draghi is very conscious of the problem and feels that monetary policy has to be adjusted to this situation. Maybe in the months to come there will be decisions to be taken and I’m confident that Mr Draghi is a man who is wise.
France and Italy seem to be having a hard time reaching the targets set by the EU for 2015. Will there be any leniency toward France and, if this is the case, what would you tell Greeks who may accuse the Commission of double standards?
When talking about Greece the only problem is not the deficit but also the huge amount of debt and the state of the economy, which needs reforms to become modernized and stronger. As far as France and Italy and other countries are concerned, I have to be very clear that my role here is not to act on behalf of my own country. If I were to do so my credibility would be immediately ruined. So it’s not a personal problem. It’s a problem of the institution, a problem of common rules. Everybody has to apply the rules, there is no small country, big country, no huge power or a country that can be neglected here – the rules have to be applied. But of course the rules have some flexibility in themselves, some room for manuever and discussions. When we deal with the Greek situation, we discuss between ourselves, we discuss with the Greek government and we try to find solutions with problems of another kind than those of France and Italy. We discuss in a concerted but fair way. This is not to say that I believe dialogue is the best solution because it must be together on the same track. But when there are problems the Commission is ready to take responsibility. So sanctions are never good solution, never, because it proves that you did not convince a country to reform and then that country is stigmatized. Anti- European parties can take advantage of that. But if necessary we won’t hesitate to take sanctions and that is very clear, that is why we have three months for France, Belgium and Italy to discuss. I always prefer consultation to punishment. Everybody needs to be reassured: The rules are there to be applied by everybody.
France had three years to correct its numbers, so why should we believe that it will manage to do so in three months?
They probably won’t correct the numbers but they have to show very precisely what structural efforts were made, what reforms are on the table and what kind of macroeconomic impact they can produce. After that you have some flexibility and there are economic situations such as low inflation, especially in countries with high debt, like Greece and others. The Greek authorities know well that it is more difficult to reduce deficits in situations where there was low growth and low inflation than in another situation.
Do you think that Europe has the capacity to deal with a crisis in a member state after the experience gained in other program countries? In the case of Greece, do you still want the IMF as part of the solution or do you think the eurozone can handle it?
Well, about Greece what, is in question now is how we end the program now under good conditions. And there I must say that I’m really complimentary of the efforts made by the Greek people and by the Greek government in order to reform public finances and the economy. Let’s have a look at the deficits. It was more than 10 percent a few years ago. Now its 1.6 percent and next year we are talking about 3 percent primary surplus. In a situation where the economy was in recession, it is a very, very important effort and there are also reforms in order to help the Greek economy to recover. I’m very glad that now our forecasts show growth of 3 percent to 2.9 percent in the next years. So the efforts were necessary because the situation was bad and the economy could not live with the previous structures. Now I think they are starting to bear fruit. I know that Greek people suffered from that, I know that they made an effort, but now I think there is hope of a success story. That is my first message of support and admiration.
We need to have more discussions and more reforms to strengthen the Greek economy – not to please us, that’s not the point – and afterward let’s hope that we can come to the end of the program and have an enhanced credit line that will be something different from the present troika and program. My visit is that of a commissioner who is a friend of Greece, sure that the integrity of the eurozone is guaranteed with Greece in it. We have all the tools. But we also need to have a shared political will.
In the last Eurogorup and especially the Euro Working Group the Commission noted the progress Greece has made, while the IMF identified limited progress. How do you comment on these different assessments?
I don’t. We are working with other institutions, we are working with the IMF and the ECB. And, finally, when we come to decisions, we must agree. At the Eurogroup we agreed on positions which were in my view as satisfactory as possible. We are close to the views of the Commission but I’m not in the good-cop, bad-cop position. I try to be fair and firm at the same time. Because we must be firm – the discussion with the Greek government is not always easy. During the last weeks I have had numerous talks with Prime Minister Antonis Samaras, my friend [Deputy Premier] Evangelos Venizelos, with [IMF Managing Director] Christine Lagarde, with Mario Draghi and all of us had the same goal. The goal was to get out of the situation honorably, to prepare the program, prepare reforms and prepare another kind of future with a credit line, which I think is a better solution.
This effort you described, was it before the Eurogroup reached an agreement?
Absolutely, and that is why I’m coming to Greece. Before I was a candidate, I had promised that my first European visit would be Greece. I could not come before as it could have been seen as something on my own. I wanted to work with the IMF, ECB and the Greek government and it would have been premature because there was no solution. The Eurogroup finally said that enough was done to satisfy the extension of the program for two months and the principle of a European credit line. Now I have the basis to give messages that are very friendly supportive but also firm, because it’s not the end of the story. There are still reforms to be done.
Do you think that with the current political situation a two-month extension is the right solution? Other member states and the IMF pushed for a longer extension.
The position of the Commission is that two to three months was the right duration for an extension.
Why more? I think the Greek government, Greek Parliament, Greek authorities and the Greek people have the means to do what is needed in that period of time.
So why more? And it’s good to have a short extension because after the extension comes at the end of the program and after the end of the program comes the credit line and another relationship with the EU institutions. It’s good for the Greek people.
You might have a different government to contend with and until now it is unclear what its position toward the troika, the Europeans, or the IMF will be. Wouldn’t a longer extension have assured that even the new government would have to stay in program?
[A longer extension] would have looked as if we didn’t trust the government effort or we did not trust the capacity of the Parliament to vote or the capacity of the Greek economy to reform. It is a sign of faith, a sign of trust that we did.
I don’t know what will happen in the presidential elections, I don’t know what will happen if there are [general] elections. I’m dealing with the government. And Monday I’m meeting with Mr Samaras – he is the prime minister of this country. I hope there is a solution.
You know Jean-Claude Juncker, through his spokesperson, sent a message that clearly we would like the present parliament to elect a president. Mr [Stavros] Dimas, who was a commissioner, is a good man.
It seems that the eurozone cannot afford uncertainty at this moment and that Greece cannot go wrong. How do you plan to avert a Greek accident?
Again, I’m not in political fiction, I am an actor of politics, and now I will act. I act with the people who are in charge, I think they are doing what is needed.
I think it is very positive that Greece stays in the eurozone, and I’m not just saying this today. In the two years I was finance minister in my country I made three visits to Athens; that’s quite a lot. And it was always for support. I have always said that we need Greece in the eurozone and we need a strong Greece. This will be my fourth visit in two years, with the same message.
Will you meet with opposition leader Alexis Tsipras?
No, not this time, but in the future I will have the occasion to do it and would be interested to do so. This is a working visit as a commissioner to the Greek authorities.
Did the political uncertainty that existed in Greece affect the stance and approach of the institutions?
Nobody likes uncertainty, the markets don’t and the EU doesn’t, but again we don’t interfere in Greek politics.
The Greek people will choose their destiny. We don’t have to influence that, but then again it’s logical that we speak with legitimate people who do and who think what we think.
Were you aware ahead of Samaras’s decision to announce early presidential elections before he did so?
No, and if I was I wouldn’t tell you.
What are the best- and worst-case scenarios for Greece?
I always think of the best scenario and for me it is that we work closely so that after the extension, the program can be completed with reforms and we move on with an enhanced conditions credit line. That would be very positive for Europe as well and would also change the perspective, the method. We will not have the troika as it is today.
I know that people in Greece want something different. We also want something different.
We will have a different partnership and that is for me the best preferred scenario and that is the scenario I advocated in the last 40 days and will fight for in the months to come.
If there is a crisis in another country, will the International Monetary Fund become involved?
I’m not so sure the IMF would like to be involved in such cases.
What I do know is that we are rather in a virtuous circle today.
When I became finance minister in May 2012 the program countries were Ireland, Spain, Cyprus, Portugal and Greece, and now Cyprus and Greece are looking toward the end of the program.
What is all this talk about catastrophe? Try to build better future. You know I’m not optimistic in principle, I know the difficulties, but I’m optimistic by will.
If we fight difficulties then we can build a better future.
