Greece's New Economics Minister 'Europe Doesn't Need To Be Afraid'

Greece wants to remain in the euro zone, but Athens wishes to renegotiate everything relating to the current austerity regime. SPIEGEL spoke with Economics Minister Giorgios Stathakis about how the new government intends to address that challenge.

Greece wants to renegotiate its austerity program and kick the Troika out of the country.

Greece wants to renegotiate its austerity program and kick the Troika out of the country.

SPIEGEL: Mr. Stathakis, should Europe be afraid of a self-confident Greece that refuses to pay its debts?

Stathakis: Afraid of what? No, you don't need to be afraid. Syriza was all along arguing that the terms imposed by the troika have extremely negative effects on our economy and on our people and that they must be changed. The same is also true of Europe.

SPIEGEL: How do you mean?

Stathakis: By way of changes to financial policy toward a more expansive public monetary policy. Our citizens are tired after five years of strict austerity; they feel as though they have been punished by Europe. We need a new agenda for a healthy economic development and a sturdy fiscal framework that alleviates the negative social effects of the crisis. That is why Syriza's election victory could help push through a new type of crisis management in Europe.

SPIEGEL: Still, with his demands for a debt cut and promises of billions in gifts to Greek voters, Alexis Tsipras has frightened his European partners.

Stathakis: We have always said that the solution to our problems must be a European one, with agreement from Europeans on the basis of a very sound idea of mutual interests. That's why we have partners. On the other hand, it has to be a major policy shift to be made in Greece. That is unavoidable.

SPIEGEL: Will Greece remain a member of the euro zone?

Stathakis: Definitely, yes.

SPIEGEL: What will be the first measures taken by your government?

Stathakis: Step number one is finding a response to the humanitarian crisis facing our country. We have to alleviate the extreme suffering of the people, some of whom can't even afford power anymore. After that we will -- week-by-week, step-by-step -- address additional problems to structurally improve the social situation and to strengthen the economy.

SPIEGEL: To do that, you need money. Programs to provide healthcare and food to those in need combined with increases to the minimum wage and retirement benefits are likely to cost close to €13 billion ($14.74 million). Making matters more complicated, the current EU aid program for Greece expires at the end of February.

Stathakis: That is true, which is why we will begin negotiations as quickly as possible, but not with the troika. We will take the initiative and meet with European leaders. We want to agree on a framework for a new agreement with them -- with the approval of our European partners.

SPIEGEL: What do you mean specifically when you speak of wanting to renegotiate the bailout package?

Stathakis: We need a practicable solution to get Greece's public debt under control. Currently, around 5 percent of our gross domestic product goes toward servicing our debt. It would be better were debt payments pegged to growth: In times of higher growth, we'd pay more. In times of lower growth, we'd pay less. At the same time, strict austerity needs to be replaced by a new agreement on the following basis: We want a balanced budget, we want to adhere to fiscal rules, but we also need growth impulses for our economy.

SPIEGEL: Should the debt haircut Syriza is demanding be at the beginning of such negotiations or at the end?

Stathakis: It is too early to say. But everything is up for negotiation.

SPIEGEL: What happens if the Europeans don't agree to a new debt cut?

Stathakis: We should wait to see the results of the talks and how realistic new proposals in the fight against debt really are. We aren't the only ones who have ideas. There are also deliberations in Germany and at the IMF. The agenda is totally open.

SPIEGEL: Athens is currently scheduled to pay down €2.3 billion in debt by the end of February ...

Stathakis: We will serve that.


Stathakis: We will serve that.

SPIEGEL: Your governing coalition consists of the radical leftist party Syriza and the right-wing populist party Independent Greeks. Aside from your rejection of austerity demands from Brussels, not much unites your two parties. How is a government like that supposed to function?

Stathakis: Syriza is the main party in the government and we have a small partner with whom we have great differences on many points. Both sides are aware of them. But it was the only option for a stable government, and that will be enough for a time. The important thing is: We will implement our social program, the administration reform and the renewal of our relationship with Europe. That is 100 percent Syriza. We will have to find compromises when it comes to other issues.

SPIEGEL: Because of your thin majority, should the Greeks begin preparing for snap elections soon just like in 2012?

Stathakis: No, with a few independent parliamentarians, our government will be able to rely on a broader political basis. We are the best and most stable government in decades.

About Georgios Stathakis
  • DPA
    Georgios Stathakis, 61, is an economist by training and will be in charge of the economics, infrastructure, tourism and shipping portfolios in the cabinet of newly elected Prime Minister Alexis Tsipras. He will lead negotiations with Brussels together with Deputy Prime Minister Giannis Dragasakis and Finance Minister Giannis Varoufakis. The son of a shipping magnate, Stathakis used to be a communist and taught Marxist theory at the University of Crete prior to joining Tsipras' cabinet. He tends to avoid shrill tones, instead favoring more moderate ones.

Discuss this issue with other readers!
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Page 1 02/02/2015
1. GR - Europe
The Minister says that the issue of Greece is a European one and needs a European solution. In plain English that means we need concessions... you (EU) give.... we (GR) take. Obviosly, if you are Greek, that' only fair, or?? Karl
namberak 02/02/2015
2. 'Europe Doesn't Need To Be Afraid'
A well known European once said that the problem with socialism is that eventually you run out of other people's money. I think that's where Greece is. Also, you have to love the chutzpah of someone who's been in a job for about a day and a half who says 'We are the best and most stable government in decades.' Or is that actually a commentary on the stability of Greek government over the years?
Stelvio 02/02/2015
3. Suicide by politics
My Dear Friends in Germany, Your Politicians and Industrialists have sold you down the river; whether through ineptitude, greed or arrogance it matters not. You work harder than most, pay your taxes more honestly than most, and your reward is to be told you will have to work even harder and pay even more taxes. But then, if you keep voting for people like Merkel, maybe you just deserve everything bad that happens.
peter.clarke.1671 02/03/2015
4. The Germans should reflect on their own history concerning Greeks odious debt.
As in the aftermath of World War II, the Allies, remembering the disastrous consequences of German reparations after the First World War, did not insist on their pound of flesh as Germany and the EU does now with Greece. The entire Nazi public debt, amounting to over 600 percent of German GDP, was written off. Further the German Federal Republic itself, after 1989, did not condemn the former East Germany to austerity as a remedy for its fictitious communist economy. Instead, Chancellor Helmut Kohl allowed the eastern states to exchange their nearly worthless Ostmarks for Deutsch Marks at the inflated rate of 1 to 1, and then poured the equivalent of more than a trillion Euros into the reconstruction of the eastern economy. Germany lived well beyond its means during the Nazi era, plundering the rest of Europe as well. If Germany had practiced what they are now preaching for Greece, Germany today would be a much poorer country. So now let’s couple Greek budget and tax reform with a large infusion of funds for economic modernization and public improvements in the spirit of the Marshall Plan and how it helped Germany after WW2? Not with more funds but by writing down the Greeks EU debit by half so today and in the future Greeks young and old, instead of looking at 40 percent unemployment, could gain productive jobs. And the entire Greek economy would gain a big macro-economic boost and a path to greater competitiveness within the EU. Similar to how Germany handled the East Germany unification bailouts and relief. Most importantly, the EU would gain the moral authority to work with Greeks on politically awkward reforms. It’s one thing to grudgingly tolerate technocrats who are bleeding you dry in order to satisfy bankers—quite another to work with development specialists who come to Greece bearing gifts. As has been said the EU and the ECB could call it the Merkel plan, so that Chancellor Angela Merkel might be remembered not as the jackbooted German who destroyed Greece but as the wise European leader who tempered austerity with sensible mercy. The time is here for the IMF, World Bank and ECB to immediately recognize and understand that Greece, like other poor countries or developing ones, that have enormous unsustainable odious debts, has very little capacity to repay such a debt. Further it is morally and economically appropriate for Greek to refuse and question or recognize the legitimacy of this odious debt forced upon the Greek people and their economy. Greece its government and citizens must not be held in this position of having to borrow more just to service a debt, and no longer be asked to service such a debt when it has little to no trade surpluses.The one way to keep Greece and the EU economically and financially together and for Greece Greece to get out from under its debt is similar to that of how Germany got out of its debts after World War 2. The current Greek repayable amount must be reduced by 50% and stretched out over 35 years. Also such a new agreement must state that repayments on this reduced loan are due only when Greece has a trade surplus & repayments be limited to 5% of export earnings.
brian.elliot.58 02/06/2015
5. Trade
Like it or not no point in screwing Greece into the ground. Greece has nothing to trade in real terms. Germany should look at this debt as a pension plan. 100years pay back knowing they are going to get double their money back. Allowing Greece to get back on it feet. Doing it that way they become the good guy's
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