George Papandreou - Prime Minister of Greece, 2009-2011 HARDtalk

Grammy Awards in the United States. It is time now for HARDtalk. Good

night. I am in Athens at the headquarters

of the officers of the former Socialist prime minister, George

Papandreou, who resigned in the throes of the debt crisis. Now that

the country is to receive the bail out of 130 billion euros he is

talking exclusively to HARDtalk for the first time since he stepped

down from office in November. Did he believe he was in any way

responsible for the current predicament that Greece finds

itself in an ball was he thinking when he made what many said was an

ill judged to call for a referendum on the austerity measures.

George Papandreou, welcome to HARDtalk. They re nice to be with

you. The latest bail out deal, does it mean Greece will avoid going

bankrupt? This is an historic decision. We have turned a page for

Greece and for Europe. Greece will not go bankrupt and will not end as

at the eurozone. We still have a prospect ahead of last but we are

given a positive outlook because they raised a great sense of

insecurity. All the talk about the possible default, exiting the

eurozone. We can say that we are in a situation where we have much more

security, they secured road for changes and reform. No sooner has

the deal being struck and people say you are staving off the

inevitable. One report from Reuters news agency, dated 15th February,

quoted international experts saying you are going to have to default on

their debts at some time. I would like to answer to some of these

international experts. We will not the fault and they said the euro

and this is, this deal has clenched the best prospect. It means we need

to do hard work. I would also demand more respect. We have made

major sacrifices. From who? International analysts and people

in the market. A D mean by that? There is a lot of pressure on

Greece, speculation about what will happen with Greece. This has

created great pain in Greece. It has even contributed to the

recession because people invest, people are not consuming and

foreigners are not investing. you accept that as the finance

minister has said, there are forces in Europe trying to push Greece out

of the euro? I believe there is a minority view that people, some

people felt that if Greece left the euro it might be a solution. I

believe this would be a catastrophe for Greece, the Greek people who

will endure much more pain. Second -- secondly the effect will swear.

I say to you, before the deal was struck it was said that there is a

view that if one country is pushed out of the euro, it would mean that

others would have to follow. The structure collapses. This is just

not true, it was said. Do you want to take the risk is the question.

We have seen that when Greece was put into a bail out programme,

other countries followed. When there was fear of default, it

spreads the cost of borrowing - it rose for Portugal, for Ireland,

Belgium, France. Nobody can guarantee they will not be

contagion. Some body as mainstream as that says it is not true that

the structure would collapse. She is Ron? It is hopeful thinking. We

could be very sure that if we don't take all the measures, this could

unravel. For the rest of Europe? For the rest of Europe. What we are

doing is important for the Greek people and also for the future of

the eurozone. I will talk to you about what you're doing in Greece

in a moment but to carry on with this, I want to say to you what is

being said in Europe now. The Swedish finance minister says, "The

Greeks remain in their tragedy but I think we have reduced this to

just a great problem. It is no longer a threat to the rest of the

zone." I believe fighting the problems in Greece, for Greece is

helping the euro two survived. to survive. We are linked in the

eurozone with the common currency. Why should people care, you like --

you are 2%. Even though we moved quite quickly for Europe, we moved

slowly for the markets and this has put more pain on Greece. Greece is

also seen as a precedent for other countries. That is what will create

fear in the markets. They will tell you that whatever happens in Greece

will be seen, whether we liked it or not, it will be seen as a

precedent. You are sure of that? You don't think opinion has shifted,

others seeing it as just a problem for Greece? I would say it is not

the case. I would also say that there are other issues Europe must

now address which have to do with four to find the euro. It has

nothing to do with Greece as such, Europe more widely. Common Borel

wing such as eurobond. -- borrowing. Under the deal the country has to

accept that the economic monitoring commission will make sure that you

do abide by the tough austerity measures that the coalition

government has signed up to. You only get the 130 billion euros -

and you get it in parts. You will be watched. People are saying that

Greece is not sovereign, it is being governed by Berlin. This is

something that we all want to bring back our own pride, our sense of

autonomy, if you like. That is what we need to do. We need to build up

our own strengths. The umbilical cord has to be broken and we have

to be able to stand on our own feet. Off we have great potential in

developing green energy, creating a tourist industry that is more

robust, great agricultural products that are not dependent on money

from the European Union. You have got a long way to go. You know

tourism only account for 20% of your foreign currency earnings. You

have to import most of your food. That is what we have to work on,

make the changes. That is why we need time. This deal gives us

breathing space. If you deliver. On the question of sovereignty, the

efforts of Chancellor of -- Chancellor Merkel. I think we need

much more democracy in our European institutions. We need, not only in

Greece but in Europe, people feel that there is a ownership in the

programme. Right now people feel this Tim -- people do not feel

empowered. This is a question for Europe. You see it from the German

point of view - they say why should we work until we are 65 so that

great train drivers can retire at 50. -- so that Greek train drivers.

D had sympathy with that view? -- do you have. None of the problems

we have had in the eurozone which makes it quite unique, we are a

family but we haven't really understood how deeply

interconnected we are in Europe. That is why we need more economic

governance. We need to get away from populism, prejudice and

extremism. I have seen it around Europe around this problem. Forces

that are prejudicial, even sometimes racist trying to escape

but what the problems are. I would say it is popular forces that are

prejudicial. For example, it was said at times that Greeks are lazy.

We work more hours in the OECD than anyone. Is that the case? The train

drivers' work three days a week, retire at 50. We have to solve

those problems. We have made major changes. Truck drivers, we have

opened up the profession. 150 professions have been opened up. We

Looking at your record, when you said you were campaigning, he said

at the time on the campaign trail that the money was the. Obviously

because you are head of the Socialist Party and a keen on

public spending, that was the campaign platform. That was not the

campaign flat -- platform. I said there was money but we have to see

where we were going and we do find it. We could find it through tax

evasion, taxing the rich, find it through waste,... You did not do

any of that. We have done more reform than any government in the

last 30 years in just two years. You were supposed to privatise

billions of euros. He signed a deal with the IMF in a 2010 and you were

supposed to make a very severe budget cuts to try and reduce the

number of Public Employees and by a thousands. You do not managed to do

that. So many targets you were offered. The ad is not true. 30,000

public employees were supposed to be lost by 2010. -- that is not. We

have reduced close to 30,000 public civil servants. We have hit tax

evasion and waste. For example, we had prescriptions from doctors and,

I will keep it blunt, big pharmaceutical companies to

oversubscribed. On privatisation, we are not privatising now. We will

not until the market sees that Greece is moving in a positive

direction. That would not be good for the Greek economy or paying off

debt. We can get more through privatisation if we get Wael

important investors who really want to develop our economy and our

industries. -- get we'll important. Qatar is investing in a beautiful

spot. They will be waiting to see... Whether you stay in the do or not.

The exactly. But looking at your role specifically... But this is

where the deal is imported. It gives us security and the investor

security. If you invest in Greece... You think the deal is still well?

Yes. 150,000 2050 employees by 2015? -- employees by. The pension

system has already been revamped. We have already put assets into a

privatisation holding. But did you actually... I spoke to the Finance

Minister under the outgoing government before you. He said you

found a terrible situation. He blamed the previous government and

said the budget deficit was worse than you thought but he took a

while in getting your act together and going to the IMF. Did you go to

the IMF too late, to the EU? Do you think you signed up to a deal that

was the wrong one for Greece when you see what is going on now?

of all, for 5.5 years, the previous government almost doubled the debt

from 180 billion to 320 billion. And they did nothing as far as

reforms are concerned. I was personally hit with a huge

responsibility which I was glad and honoured to take on. It was a very

dire situation. It was impossible to not think about my political

future. I had to say I would save my country. Let me answer your

previous question, I do not want to go to the IMF but we needed to

prepare for it. We did prepare for it. We did not have such a

mechanism before. It is the biggest bail-out programme in humanity's

history which we got. I hoped the markets would allow us more time to

make the necessary changes. I had to initially convinced by partners

in the EU to say I would make the reforms are. And we are making them.

Taking the public sector, changing the pensions, which consolidated

1,500 local governments to 300 governments. So what went wrong?

Did you think you make -- made any personal mistakes? For a new take

action in anything you do, you can always go back and say you should

have done it a certain way. -- when you take action. We could have

pushed even further structural changes, even more quickly. Even

though it was difficult with the Civil Service which was not ready.

You have a bloated state sector? Yes. It is hugely bloated. A state

that came out of four for -- or thought -- dictatorships. This

country has been led by the PASOK party for eight years. Your party

must take the blame. Not just eight years. It was approximately two

parties. The new democracy and PASOK party. It has mostly been

your party. We can look at the dates but I am proud that PASOK

party made huge reforms. If you were slightly liberal reading, you

could not get a job in the public sector. But you kept the bloated

state institutions. Should you have done more faster? And looking back,

we tried to create a more equal society. We tried to give more

benefits to people. But also, being in the European Union, it helped us

not to look at some of our weaknesses. It helped us find money

that we did not always invest in areas that would make us

competitive. Also, there were mistakes made on the European side.

For example, we were a test case. Like a rat lab... Or a lab rat.

Nobody had faced such a situation in the EU. The programme they gave

us, it had high interest rates, much higher than Portugal and

Ireland afterwards. That changed only yesterday. Secondly, the

proposal from France and Germany. If you lend to countries that are

high risk and made a fault, you as the banks will pay for it. That

statement pushed a programme that was on track. And then Portugal and

Ireland were next. But that created such a fear and exciting in Greece

and the round Greece which brought recession. I must ask you about the

referendum. He received a great deal of criticism about that. In

November 2011, he said he wanted a referendum. You never said

specifically. If you want to ask the Greek people to stay in the

euro or were you going to ask them whether they accepted the austerity

package? The referendum question was whether they accepted the

measures of austerity, the programme. They would keep us in

the euro. That was the question. But have you not already decided

that when you signed the deal with the IMF in May of 2010? I had

decided that as prime minister of the country. But I believe the

ownership of this programme, and you can even see today some people

say, will be parties accept this? Will be Greeks accept this? I

believe a referendum would have been positive. Why did you feel you

have to go in the end? It would have been a positive yes and it

would have been an ownership of the programme. The Greek people would

have owned it. I want to get the insides into your thinking at the

time when he resigned. What was going through your mind? Did you

feel dejected, that you have failed? Not at all. I tried to

create a wider consensus around very difficult programmes. One

which I as a socialist would have to take measures that might

otherwise would not have done. Heard people on the main street, if

you like, wage earners. There are now taking a lot of the brand. --

hurt. I would have liked to see more of a reformed. But the crisis

killed your political career in Greece? Let me finish this. The

burden would have been equally shared by the rich and that would

have taken... Would have been the major role structural reforms. --

major structural. If we had done that, we could have solved this

problem without all of this pain. Or at least less pain. What

happened of course is that once we reached a point when we needed to

take new measures, I said to take this to the Greek people. Otherwise,

if we did not go to a referendum, the alternative would have been a

wider coalition government. With a wider consensus. When I proposed

the referendum, immediately we had a reaction from other parties and

some party said, OK, we are ready to discuss the collision. It was my

proposal and gladly, we do have a coalition government. Part of the

idea was I would step down and we at

was more politically neutral. If a politician wants to be honest with

him for himself, it needs to be ready to make very difficult

decisions, whether they hurt or not the political career. Forgetting

about the polls, forgetting about the circumstantial political

situation. Looking for the benefit of the future of his or her country

and the benefit of his or her people. No regrets? No. I believe