First, allow me to thank you, thank the Green Party of Germany for this invitation. It is an honour to speak to you tonight, and I am happy to be here with good friends, not only Dany but also Cem. With Cem we have talked about Red-Green cooperation, Greek-German cooperation, but we have also talked about Greek-Turkish cooperation. So I cherish this very close personal friendship with Cem Özdemir.
And you are debating the future of Europe, and I’d like to say a few points on how I see we can work together. I would like to work together with the Greens in Greece, but also Europe-wide and worldwide. But let me first of all thank the Green Party, and through you the German people, for the solidarity you have shown towards the Greek people in these difficult times. Thank you very much.
In 2009 I became prime minister, after a conservative government almost doubled our debt, from EUR180 billion to close to EUR320 billion, in five years. We were forced to take very harsh measures not to default. Unprecedented results we got in fiscal consolidation, not just unprecedented for Greece, but also for the eurozone. I won't put a lot of numbers in front of you, but I can tell you that your Minister of Finance Wolfgang Schäuble said that if he had done the same cuts in Germany it would amount to EUR125 billion. So the Greek people have been willing to make painful sacrifices. They rightly feel, however, that the burden has not fallen on the shoulders in a just way. And this is a problem for our citizens.
That is why I have said even before I was elected: Greece is not a poor country. It was a mismanaged country, because of clientelism, because of inequality, because of lack of transparency, because of vested interests and privileges. My regret, if I have one, has always been that my government was not able to make the reforms and the changes before the crisis, so that we could then deal with this in a just way. But we had to do this. We had to make the changes also, and we are doing this in parallel.
There are many changes. We have done more in these two years than in the past ten or twenty years in Greece, from how we employed people in the public sector through absolutely meritocratic means, through cutting waste in the medical area – we put every prescription online, and we cut medical prescriptions by 30%; by fighting tax evasion – we confiscated 550 yachts last year; by revamping our pension system so that it is viable, and cutting out 40,000 pensions that were non-existent but we were paying and billions of euros that were being lost; by opening up a hundred or more professions.
But in 2009, when I went to the European Council with my colleagues there, I said, “I can spend my political capital in cutting wages and in cutting pensions. But if we do not modernise, if we do not change the Greek state, all our efforts will be in vain.”
We needed time. We needed time to make these changes, and we need time to make these changes.
However, the markets did not give us time. Our priority - and my priority - was to make sure that Greece would not become bankrupt and that we would keep Greece in the eurozone. And I have taken all the necessary decisions at a high political cost, but I have said from the beginning: my problem is not being re-elected. My problem is to help Greece. My problem is to help Greece not become bankrupt. My problem is to help Greece stay in the eurozone. And my problem is to help Europe also, in our fight for a different Europe.
A different Greece in another Europe
Dear friends, on the last decision on October 26, a very important decision for Greece which will lighten its burden by 50% of the private-owned debt, breathe life into our banking system, guarantee our financing for the next few years – it will give us the time we need to make the changes. And I want to say to you that your investment in Greece is not an investment in the Greece of the past. It’s an investment in the Greece and the hopes of the Greeks in the future. That is the difference, that your investment is helping us make a different Greece.
But I have also said this is not only a Greek problem. It would be easy if it was only a Greek problem. We are responsible for our failings, as of course Europe was also responsible for not monitoring the previous government and allowing the debt to rise.
But this brings me to the first point, the first point where I see we can converge. We know, both Green and Red, that we must be fiscally responsible, and we have shown this now in Greece.
But we also know that this alone will not solve the crisis. If every member state in the European Union cuts its budget, this will not solve the crisis. We need, yes, fiscal discipline at the national level, but at the European level we need responsible and viable growth policies.
We don’t say let’s throw money at the problem. We should invest in a Europe that will become competitive, a Europe of quality and of competitive products. And the question for progressives, both Green and Red, is how we can revive Europe and make it more responsive to the new global challenges. Because Europe is challenged today with slow growth. We are facing historical shifts towards Asia, other emerging economies. But there cheap labour, lack of collective bargaining, lack of democratic or social rights, downgrading of the environment – these may be in the short run some competitive advantages that they have. But this is not a viable path, and this is not the path that we in Europe must take.
Copenhagan’s lost opportunities
Dear friends, our competitiveness must be based on quality rather than inequality. Quality products, investment in green, clean energy and agriculture, green development, investment in quality education, in innovation, in broadband and transportation infrastructure. And of course, investment in the quality of life, social cohesion and equality of opportunity. Together in Europe we should have a green growth strategy, if you like a green growth revolution, from a high-carbon economy to a low-carbon society.
As head of the Socialist International, we tabled a proposal in Copenhagen to this effect. But I believe that the world lost a great opportunity in Copenhagen. If we had created a global framework and regulation to seriously deal with climate change, at the same time we would have created the incentives for private capital around the world to invest in green growth, green technology, green education, and do so much more seriously. This would also be an answer, even a partial one but a strong answer, not only to global warming, but also to our economic recession.
And for Europe this would be an answer to our competitiveness problem. Greece I know will not become competitive through cheap labour. We will become competitive when we become a green economy, an economy of quality products. And we have many comparative advantages. As you said, Cem, through our projects such as the Helios project and our sun, we can. And this is something which is not only for Europe, but it’s also for the Mediterranean and those who are fighting for the Arab Spring in the Mediterranean.
Quality growth and more Europe
Second point of convergence: Where will we find the money for this investment? We can generate resources, investment and jobs by introducing a financial transaction tax, a tax on greenhouse gases, a tax that will help invest in infrastructure projects. At the same time we should look at Eurobonds, which would also stimulate investment. Just when Europe needs it most, at the same time Eurobonds can be helpful for projects, but they can also help reduce the tensions in our sovereign bond markets, the persistent stress in our banking system.
We need to communitarise both our debt but also our investment planning. And we know, as Cem said, Germany depends on Europe, its biggest trading partner, with 60% of German exports to Europe. And of course Germany knows that it is quality that has played this role. So we need quality in growth.
A third point is more Europe. Yes, everybody is saying now we need more Europe. What does this mean? Well, from my experience in the crisis it is Europe where we need more democratic oversight of the markets and the banks. The conservatives have paid lip service to regulating the financial system. But what has happened since 2008? There is no more real transparency in the banking system. We are almost in 2012. Where is the democratic oversight of the rating agencies that now have sometimes more power than our democratically elected parliaments? Where is the financial transaction tax? Where is the transparency with the credit default swaps, the speculative bets against our economies?
Where is the transparency concerning tax havens, where rich Greeks and not only rich Greeks can evade, robbing resources from our citizens? Many people in Germany ask me: Well, why aren’t you taxing the shipowners in Greece? And I say, “Well, shipping in Greece and shipping in general is the most globalised industry in the world. And when you start taxing, they just move the flag from one country to another, from Greece to Cyprus, to Malta, to Liberia or to somewhere else”.
This is why we need to work together. Yes, we are now signing with Switzerland, as Germany has, an agreement to tax those that are evading through Switzerland. But this is only one country. We need to make Europe a powerful voice in regulating our economies and fighting tax evasion and helping our citizens in a way which will help the common good.
And obviously we need a stronger Union. We have done much, yes, in creating the so-called mechanism of support, the EFSF. We have done much in stricter monitoring. But the markets are much quicker than we are. And what we have done is too little, too late.
A democratic Europe – the democratic challenge
But we need to go deeper in a stronger fiscal and political union. And as we go into deeper integration, as we go into Eurobonds or whatever else, there is another question, and this is my fourth point. We need a more democratic Europe.
Because again from my experience these last two years, we have moved from a communitarian method in Europe to an intergovernmental method of taking decisions to finally taking decisions by a few strong actors.
And we need therefore to renew, revive, reorganise, rejuvenate our democracies around the world. We know that we see this from Tahrir Square to the Wall Street citizens. They are alienated; they feel impotent in front of the challenges we face in the world.
And yet humanity today has more power, more expertise, more technology, more financing possibilities than ever before.
But this is the democratic challenge. Who is in control of this power? Who is overseeing this power? Whether it is media, whether it is financial innovation, whether it is our Internet and privacy, whether it is weapons or whether it is nuclear energy, these are deeply challenges to our democracies.
And I believe, if we want to maintain our democracies, we need to find ways to redistribute these powers for our peoples, to empower our peoples. Because this is the basis. This lack of power and this inequality have been the basis of the financial crisis: too much concentration of power, too much lack of transparency and democratic oversight.
And concentration of power has undermined our democratic institutions. Robert Reich, an American economist, said this is a revolving door between Washington and Wall Street, with Wall Street executives becoming public officials, who make rules that benefit the banks, and then they go back to Wall Street to make money off the rules that they have created.
So the heart of the problem is that we have allowed governments to be captured by an unaccountable, often, financial system, or lobbies, or even corruption, that do not serve our real economy and our citizens’ needs.
This extreme concentration ultimately in the hands of a few poses a threat to our democracies. As a result, our citizens often feel powerless, alienated from our institutions. So we need to reoccupy democracy, as the demonstrators in the US are demanding. And Europe should be in the forefront.
And here the question is: Do we want a Europe ruled by elites, or a Europe ruled by our citizens? If further integration is to succeed, European citizens must become the protagonists of this project. If we do not trust our citizens, then who do we trust? If we do not make Europe for our citizens, then who are we making Europe for?
This is very crucial, because if we are to make further steps in deeper integration, we can do so only with our citizens and not against our citizens. It is a fallacy to imagine that European institutions and governments can implement policies without the active support of our own citizens.
Empowering people and referendums
How can we do this? This is an area of dialogue between the Greens and the Reds, I think, in how we can empower our citizens. Myself, in the past, I have been a strong proponent of an elected by the citizens president of the European Union, directly from the citizens, or pan-European plebiscites, which we could have either through double majorities of nations and the population of Europe. These are ideas which we can look into. But this was also precisely my thinking, when I proposed a referendum in Greece on the latest bailout plan on October 26. The problem my government faced was not a lack of solidarity among our European partners, for which I am extremely grateful. Of course the Green Party has been a strong friend and ally in this fight we have.
Our biggest problem was the refusal of many in Greece, particularly the opposition parties, to support our reform efforts, but also vested interests and an establishment that was fearful of the change to a more just society. They vehemently objected to any fiscal or structural changes in Greece. They were pushing parts of society to react and resist in the most negative, even violent, way.
I don’t mean the peaceful demonstrations, which I very much respect, and I understand. I mean the power and the privileges of the vested interests that were hiding behind many of the demonstrators. And they did not want changes, because we were taking away their privileges.
So I decided to take an initiative and move power back to the citizens. I decided it was better to trust the people of Greece, their critical capacity, their sense of patriotism, their sense of responsibility, in order to bypass a political and economic establishment that did not want reform and wanted us to fail at all costs.