Dimitri Papadimitriou - Minister of Economy and Development, Greece HARDtalk

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Welcome to HARDtalk. I'm Stephen Sackur.

Greece's debt crisis and economic collapse used to be headline news,

But does that mean the country is in recovery?

Almost half of all young people are jobless and the elderly continue

With austerity biting deeper with every new release of European

bailout money, is there any way out of the hole Greece is in?

My guess is recent's economy minister, Dimitri Papadimitriou. Is

there any way out of the hole Greece is in?.

Dimitri Papadimitriou, welcome to HARDtalk. Thank you for having me.

There you were at the end of last year, enjoying your post as a highly

respected academic economist in the United States. You were plucked from

back into a senior ministerial job, the economy minister in Athens. Do

you regret taking that job, given what has happened in the last six

months? Ashley, I don't. I think it is an important challenge. --

actually. I cherish the opportunity to serve my country and they think I

can do some good. And therefore, over the last seven months that I

have been in office, I have tried to find what is the best approach to

turn around the economy, along with the help of my colleagues, not only

in the Ministry but in the other cabinets. Your colleagues, you put

it. I mean, at your boss, let's put it, Alexis C Price, a man who in

ideological terms and economic analysis, you share very little --

very little. -- Tsipras. There is a lot more then. He is not an

economist, he is an engineer. He is a radical socialist. On the other

hand, he is a realist. To get the country out of the fix that he is

in. I think he has tried to do that, despite a false start, if you like,

in 2015. Certain mistakes were made at I think what there is now is

reality. It is interesting that you put it like that at the beginnings

of his time... Alexis Tsipras represented something new and

radical and that he has betrayed his principles because in essence,

having come to power and telling the Europeans to go to hell in a

position of austerity, he has now bowed his head and is implementing

that same austerity. You know the European Union and the eurozone has

an architectural problem. Therefore, what was thought in 2015, it was

pointed out the difficulties and the problem is that the EU had in

dealing with the Greece crisis which was not really a Greece crisis but a

European crisis, could have been sold. -- solved. It turns out the EU

leaders had no interest whatsoever. At the end, the realisation came

that perhaps in order to change the European Union or the eurozone, you

needed to start from Greece first. My point is, in essence, Mr Tsipras

has betrayed the mandate that he was given in 2015. Let me quote you the

words of a Greek economist who says this. " Greek Prime Minister Tsipras

didn't change Greece or Europe but they simply changed themselves from

an anti- systemic austerity rebels, they have turned into implementers

of the new Troika Greek deal, that being the Europeans and the IMF." He

says," they denounced it as treacherous deals all the way back

to 2010. " He has a point, doesn't he? I would disagree with that. I

would say this government has changed a lot in Greece. It has

brought it to the situation that one member state needs to be like other

member states. I think he has gone through a serious negotiation

process and achieved a lot more than the previous governments had the

possibility of doing. And he has reached the point where he has

created alliances with many of the South European nations that didn't

have a chance before to talk and to actually support Greece as we have

seen in the last... With respect, Mr Tsipras has simply left a trail of

broken promises. Let me quote to you to different things that happened in

close conjunction. April 25, 2017, they use it as one of his Cabinet

ministers when Tsipras says, "Greece won't implement tax reforms without

a debt deal in place". And yet, by May 19, less than a month later,

Greek lawmakers, backed by net -- backed by Tsipras, approved tax

hikes. That is before the latest deal was done with the EU. Yet

another broken promise. In June 15, one has to take a look and see what

the agreement was. In April, we didn't know what the agreement would

be. We thought in May 15, we would have the agreement we have now. He

didn't make any promises that actually did not deliver. What he

said was that what ever streamlining would take place, what ever... Let's

not use it late -- use words like streamlining, let's just say cuts.

However you want to use it, at the end of the day, those statutory

forums that they prefer to use, have come with opposite measures that

actually leave and an effect. I'm not sure the Greek are going to be

convinced what you are saying at all. I'm pretty sure they are not.

76% of Greeks in the latest poll disapprove of what Tsipras is doing

and it's quite clear that if there was to be an election tomorrow, the

party would trout him. People have lost faith in Tsipras because he is

not standing what she stood for in the election. The polls give you a

false indication. You can use your own country. You know, you thought

that in fact the polls showed a major superiority in the Tories and

they didn't do very well. The polls, I think, depends how they are being

drawn. I wouldn't be so sure that if elections were to be held today the

differences would be that much. Let's not just talk polls but let's

talk the reality that the Greek space every single day. 22% as

national unemployment rate for under 25. The rate is well over 40%,

getting close to 50%. The minimum wage slashed by 20% since the crisis

began. 43% of Greek pensioners are now living on less than 60 euros per

month. Health-care spending down by 40%. I could go on. For the average

Greek, life today is intolerable and yet they have just seen in recent

weeks Mr Tsipras who is supposed to be that defender of their interests,

doing another deal with the bailout powers which means that the

austerity they have suffered is going to get even worse. You cannot

load everything on this government. The pension cuts began in 2010.

There have been many, many more cuts in the pensions. I understand that

which is why, the people, believe Tsipras might be the guy to say

enough is enough. You know, you are a member of the eurozone and you

have to continue as a member of the eurozone because therefore you need

to negotiate the best possible solution you can negotiate and I

think at the end of the day, if you were to look at what has been

negotiated, it's actually a plan at some significant cost, no doubt

about that, the pension cuts and tax rates, but the fact is you have to

take a look at what it is. You have got a roadmap to fiscal balances,

you have an indication that the debt is going to be resolved in a serious

way. You can't say that. Where is your evidence? I will come back to

it but I will complete it. I can't let you get away with statements

that aren't born out of... I'm not afraid to answer your question. What

I am suggesting is if you look at the total plan of what is agreed, it

provides a lot of opportunities for people to grow, for people to see

better days. Where is this roadmap that you talk about to actually

tackle the central problem that Greece faces which is that you have

a national debt that is over 180% of the GDP and just surfacing about

debt drags your economy down every single year. As long as that debt

mountain overshadows everything else, it is impossible to see how

Greece can recover. I can take a look what's happening this year in

2017. It is the year of real growth. The last quarter of 2016, we saw a

stabilisation of the economy because there was the row growth. In this

quarter, we have seen, all of the indicators show, the health of the

economy, to actually be positive. --0 growth. I was in New York for a

purpose, I was in Washington for a purpose, I was in London for a

purpose. Investing in public as dramatically changed. There has been

significant investments taking place in Greece and therefore, Greece is

on the road to recovery. Do you think is national community has

confidence in Greece? So you saw the international report from 2016 that

suggested that still Greece is in the bottom quarter in terms of

investment climate compare to all of Europeans? I am giving you what I

have observed in the last week in my visit with many investors. That's

anecdotal, I'm talking about statistics. I'm looking at

individuals who have made investments. There are serious

investments that have taken place in Greece. Do your figures compare with

other European nations? They are extraordinarily poor. The FDI

figures between this quarter, the previous quarter, the previous

quarter, and as the growth, that's what I see. That's what an

interested in, it will grow faster. This is what I see out here, this is

what I read. Therefore, that comes also with actual investments.

Phillip Morris, Blackstone, Fortress, these are significant

funds that are investing in Greece. You promised me that you would come

back to my fundamental question about how Greece deals with the debt

mountain which overshadows your economy. You still have not given me

the answer. We know the Germans still insist that there can be no

long-term debt relief and restructuring until they are

convinced that the Greek economy is on a different, better track and

right now, the German Finance Minister, and others, are simply not

convinced. But the Germans have decided along with everyone else to

be part of the growth strategy for Greece. This is why you think -- if

you look at what was agreed, they have agreed to support Greece in its

growth potential, either by creating the National development bank,

providing more European funds and being able to adjust the maturity

and the suspension of the interstate payments should the growth of

sanctions differ from the actual growth. You have accused Wolfgang

Schaueble of being dishonest in the way he blocked debt relief. What I

told the reporter, was that Mr Schaueble appeared disingenuous, not

dishonest. It's not my fault that the lady was not English-speaking.

Whether it was dishonest or disingenuous, neither are very

flattering. It is a problem and it is recognised even by his own

individuals in the SDP. -- SPD. He is not in the SPD, he is on the CDU.

But he has the coalition. It is the CDU which calls the shots. There are

other German people and colleagues appears in the year were a group

that believes he has had difficulty in understanding that when it was

discussed in 2017 that there would be starting serious discussions

about the debt, the fact this should take place. Wolfgang Schaeuble, in

Malta, April 20 1770s. "I Don't think at all there will be future

debt measures from Greece. That is the German position. That was not

the position that was agreed last year. Therefore one has to be able

to understand whether mixed -- whether Mr Schaeuble speaks for

himself or the European Union. When we come back to this question when

you in your assignment given to you by the government to go to New York,

London, paging, wherever and appeal to the world for foreign direct

investment in your country, you have a big problem when the key players

in the eurozone, Germans, are still saying that the time is not right to

offer Greece long-term debt restructuring. -- Beijing. That is a

problem. I see something different when I visit. I see people who have

realised there are opportunities in Greece to invest, opportunities to

make money because no investor makes investments without those being

profitable and that, in fact, there is a Labour force extremely

well-trained, university graduates, that can produce the goods and

services, high value-added... 450,000 of them have left the

country since 2008, graduates, young Greeks. This is exactly what we want

to do, we want to keep them. That you have lost 450,000 of them. But

listen, when the country goes through a crisis, these are some of

the consequences. The question is, what do you do to avert the

continuation of this exodus? I think the government has a plan to

eliminate that, to stop that. It's a growth strategy which I think is

going to be implemented, it being implemented and that is why some of

the investors have seen it, they have seen the opportunities. They

want to come in and invest. You talk of this group of investors and I

have looked across the piece, I don't see many of them, but I do see

one country where there is real investment into Greece today and

that is China. China has already made significant investments. And

the US. But China is striking. At 51% stake in Piraeus port. The

redevelopment of the Olympic Park, not sure of that is finalised. It

has been not finalised yet. But it is in the offing. A Chinese official

says he sees potential in the partnership between China and Greece

going to a new level. You entirely happy with the idea that China is

buying key assets and has big ambitions in your country? It's not

only China, though. I would like to talk about China. I don't know what

this means in terms of that new level. I am asking you. I don't know

what I would characterise it that way because I see other interests,

not only from China but also the US and Aust Rio, from Germany, set the

German telecommunication company announced 1.5 billion euros over the

next five years. -- Austria. Some to be spent this year. There is no

concern... Perhaps the concerns are a bit different with China. June 18,

2017, Greece and as a European Union condemnation of China's human rights

record at the UN. Senior diplomats told the press it was disgrace. What

is Greece up to? That is not a question I know, I can't really

answer the question. What I want to say... As a minister, if Greece was

exercising that kind of veto on a key human rights expression because

of a desire to win Chinese investment, would that concern you?

You are drawing that conclusion. Not just me, across Europe. Maybe they

have that consideration. It's not only that... What other conceivable

consideration for Greece to isolate itself from 27 other EU members on a

key expression of disquiet about China's human rights record, what

other considerations other than economic? I do not know enough about

the Chinese human rights issues. You said they must have been other

considerations. You are drawing a conclusion and I am not ready to

accept it because I do not know enough about it. I don't know

something about it, why would I answer? Why would I agree? You told

me there are other considerations. I don't know whether it is only

economic considerations. Consider these words, of the former Finance

Minister, he said, "Anti- European sentiment in my country is growing.

What was once a very friendly country towards Europe is becoming

increasingly less so and that is a great danger, a lot of risk." If you

believe in this, he had a lot to do with it because he passed a number

of legislations and he made some agreements they did not sit well

with the Greek people so let's not talk about what the opposition says.

Let's talk about what is happening now, what will happen between now

and two years and the expectation is in two years, with the 2% growth

rate which was agreed by the European Union, even by the IMF and

close to 3% next year, I think the picture will be different. Look in

2019 and then we can talk about that. But do you least take is point

that right now there is a danger that the Greek public are going to

be deeply disillusioned with Europe, the European project, the eurozone

if things do not improve quickly? I'm not a politician and I do not

make forecasts. Only look at the evidence based on I see, whether it

is official or anecdotal, I see a different Greece coming. There are

better days. I do not care what he says. He should not be proud of what

he did. I am interested to see what other people have said about how

Greece has performed. They carry some weight. Mr Venizelos doesn't.

How long do you have to turn the Greek economy around? I have until

the next election in 2019. Dimitri Papadimitriou, thank you for being

on HARDtalk My pleasure.