Greek PM Talks EU Debt, Cross-Border Banking
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Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk. I think I've done enough. And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts.
You certainly ask interesting questions.
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We have Kyriakos Mitsotakis, Prime Minister of Greece, here with us. We'll jump straight in. A lot of movement on Ukraine this week. You've had Trump saying stuff about it. You have various NATO allies getting cross about the fighter jets incursing into their territory and warning Russia about it. You even had Germany coming forward and saying, let's use the 140 billion euro strategy. frozen assets to help Ukraine. Now, you have always been a kind of champion of this idea of having a common European fund for defense. And you've always had pushback from the Germans on that. Do you think now it stands a chance of going through?
Well, thanks for having me, John. I've been advocating for quite some time about the need to create some joint European borrowing facility to cover what I consider the quintessential European public good, which is common European defense. And I do sense that there is much more momentum now amongst my colleagues. Some of the countries that were inherently against the idea of additional further joint borrowing have changed their mind. And I'm pretty sure that Germany will eventually also agree to this necessity. And we need to make sure that this facility finances projects of common interest. And I would put missile defense, drone defense right up there in terms of our collective European priorities.
So I would expect some movement soon. We have two European councils. And hopefully we can make progress towards that direction.
Just looking at the economy at the moment, the Greek economy has been doing very well, as no doubt you will tell me. But in 2024, you forecast a deficit and then you ended up with a surplus. And this year, you're again forecasting a deficit. But it's quite close to the end of the year.
What is the momentum for joint debt in the EU?
I wondered if now you're close enough to say this year you'll end up with a surplus again for the government.
We've been producing significant primary surpluses, and I think it's quite possible that we may have a real surplus again this year. This is a foundation of our economic policy. We've suffered a lot from not being fiscally disciplined. This is not going to happen again. But I think the big success of our policy is to ensure that the economy is growing at the same time, to create jobs. We've created 500,000 jobs since I became prime minister. And the real goal is to ensure that this collective wealth is spread equally. So my focus now is to use whatever fiscal space I can create through growth and tackling tax evasion to cut taxes for the middle class. It's important for me that this discussion is not just limited to the economists saying good things about the economy.
I want the average Greek to really feel a tangible benefit from this growth story. And starting January 1st, when these tax cuts will kick in, they will see a real increase in their paychecks, and this is very, very important to me.
Let's come back to the average Greek in a second. You just mentioned fiscal discipline. You look at the core of Europe. I sat down with Prime Minister Sanchez of Spain the other day as well. Something dramatic has changed. Greece, Spain, you're the countries growing really fast. In the middle, you've got countries in much greater trouble. You look at France. You're growing, let me know, over 2%. They're struggling to get to half a percent of growth. Their debt is ballooning. Are we now in a situation where you would worry about financial contagion from France?
This seemed inconceivable a few years ago. What I can tell you is that eventually no one can beat the markets.
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