The role of Greece and its importance as an energy hub in the wider region, described the Prime Minister Kyriakos Mitsotakis during the discussion he had tonight with the journalist John Defterios in the forum "Future Investment Initiative", in Riyadh, Saudi Arabia, in the presence of the Prince Successor to the throne of Saudi Arabia, Mohammed bin Salman bin Abdulaziz Al Saud.
Mr. Mitsotakis praised the level of relations between Greece and Saudi Arabia and the Gulf countries, reviewed the situation in the energy sector worldwide, estimated that natural gas will be the transitional fuel for the foreseeable future, and said that It could be transported by a pipeline, such as East Med, which will transport gas directly from Cyprus, Egypt, Israel, Greece, or it could be liquefied natural gas that will be transported to Egypt, and from its liquefied form will be revitalized in Greece.
"We have the ability to supply not only the Greek gas network, but also the European gas network." said the Prime Minister.
He also referred to the promotion of our electricity interconnections, noting that we had signed an agreement with Egypt, and expressed confidence that there would also be great interest in extending such agreements to Saudi Arabia.
"If this area has the potential to generate very cheap electricity from renewable sources - and I am referring primarily to the sun - would it not be in the common interest to transfer this electricity to the European market? How can this be possible? It could be done if we created an interconnection either from Egypt or from Israel to Greece. And then from Greece, the electricity could pass to the European market "said Mr. Mitsotakis.
Referring to the agreements signed by the government with France and the United States, the Prime Minister said that there was no geopolitical threat, and that Turkey "will finally realize that this aggressive stance in the Eastern Mediterranean is not going to lead it anywhere." stated that our country is open to dialogue.
At the same time, Mr. Mitsotakis referred to the work done by the government during its term, reiterated that he will end his term, and stressed:
"The main message I want to convey today is that the Greece of 2021 has absolutely nothing to do with the Greece of the previous decade."
The entire dialogue of Prime Minister Kyriakos Mitsotakis with journalist John Defterios (in an unofficial translation from English) is as follows:
John Defterios: Mr. Prime Minister, here in the Middle East, you had bilateral meetings with His Majesty Mohammed bin Salman as well as with the Crown Prince of Bahrain. Before we move on to the effort for the wider recovery of Greece, what do these contacts mean for the strategic relations that are developing between the heart of the Mediterranean and the Gulf region? What do you aspire to "build" here after this visit?
Kyriakos Mitsotakis: First of all, thank you very much for the invitation to this very interesting meeting. However, it should come as no surprise that the Greek prime minister maintains strong ties with the Gulf region. After all, we live in the same wider region, we share the same geopolitical challenges, and since I took office as Prime Minister, one of my top foreign policy priorities has been to establish strong ties with the Gulf. This is my second visit to Saudi Arabia and I believe we are at the beginning of forging a very strong strategic partnership between our two countries, which has many different aspects, both geopolitical and economic. I am very glad to be here, we had a very interesting discussion with His Royal Highness and I believe that many positive developments will emerge from this visit for both our countries.
John Defterios: Is this physical proximity? I know that you have close relations with the United Arab Emirates, while Saudi Arabia is the largest economy in the Middle East and North Africa in terms of investment and a strategic ally for the Eastern Mediterranean. How do you see it?
Kyriakos Mitsotakis: The Eastern Mediterranean is an area of common interest and Greece is, together with Cyprus, on the external borders of the European Union. We have worked hard to convince Europe of the strategic importance of the Eastern Mediterranean in terms of migration, energy, geopolitical stability and the wider stability of the region, which is a common concern for all of us. We are committed to protecting Saudi Arabia through a Patriot array, which we have developed jointly with other allies. And of course we can further strengthen this strategic partnership, because in the end, countries that promote stability, international law, respect for the law of the sea, ultimately share guiding principles that lead us forward.
John Defterios: I would not start from this point, but I think with the presence of His Royal Highness and the Crown Prince of Bahrain, it would be very interesting to start with the Eastern Mediterranean. My question is, if all this goes on, it could be a counterweight to Russia's influence over gas in the European Union. We're talking about a window of opportunity, aren't we? So you have a Defense Agreement with France, which is an important move, the US has renewed the defense cooperation agreement with Greece, another important move, and you are building alliances here, in the Gulf region. So is it time to move on to the gas field and, consequently, to address Turkey's desire to claim that field?
Kyriakos Mitsotakis: Of course. I'm glad to point out that we signed two very important strategic partnership agreements last month. A defense agreement with France and the five-year mutual defense cooperation agreement with the United States. At the same time, we are following developments in the energy sector in Europe with large increases in gas prices. And we need to remind ourselves what is the logical way to diversify our gas supply sources. And I believe, like most of my European colleagues, that gas will be a transitional fuel for the foreseeable future.
So if that's really the case, how can we make the most of the gas reserves in the Eastern Mediterranean and the Middle East? Various ideas have been proposed. It could be a pipeline, the East Med pipeline that would transport gas directly from Cyprus, Egypt, Israel, to Greece, or it could be liquefied natural gas that would be transported to Egypt, and from its liquefied form will be re-gasified in Greece, where we have the ability to supply not only the Greek gas network, but also the European gas network. So this is the first stage.
The second stage would be the promotion of our electrical connections. We have signed an agreement with Egypt, but I am sure there will also be a lot of interest in extending this kind of agreement with Saudi Arabia. If this area has the potential to generate very cheap electricity from renewable sources - and I am referring primarily to the sun - would not it be in the common interest to transfer this electricity to the European market? How can this be possible? It could be done if we created an interconnection either from Egypt or from Israel to Greece. And then from Greece, electricity could pass to the European market.
And if we look even further into the future, if we talk about hydrogen, hydrogen could also find its way to the European market. Thinking about the future, Greece, again, due to our geography, is in the right place to be a transit country for all energy sources. At the same time, what we are doing is developing our own production capacity in the field of renewable energy sources. We are closing all our lignite plants, a process that will be completed by 2028 at the latest and we are investing heavily in renewable energy sources, while our new goal, which is of great interest - and I am sure it will also be of great interest for Investors operating in the wider region - is offshore wind energy, for which very soon we will present a legal framework to utilize the significant wind potential we have in Greece.
John Defterios: I would like to know if there is interest here in Saudi Arabia, the United Arab Emirates and other regional investors to be active in the gas market. Do they also see the prospects that you currently see in this field?
Kyriakos Mitsotakis: It is certain. But our discussions covered many different areas, not just the energy sector. The main message I want to convey today is that the Greece of 2021 has absolutely nothing to do with the Greece of the previous decade. We have gone through a very difficult period, a deep economic crisis, as you know. But since our government took over, and despite the Covid pandemic and geopolitical challenges in what has to do with Turkey, we have implemented very important reforms, reduced taxes, the investment climate is much better and we are now attracting significant foreign investment at unprecedented levels.
So I believe that Greece is at the very beginning of a long-term development cycle. And I want the funds that will come from this region of the world to be part of our success story. And we are already seeing a lot of interest in many different areas. Take for example the part of hospitality and tourism, where we have always played a leading role, but we need more facilities of high standards. And this is an area where there are synergies between Greece and Saudi Arabia. We have the know-how and Saudi Arabia can do great things in the hospitality industry. So there is another area of possible cooperation where we can transfer our know-how to a country that explores its prospects in various types of investment.
John Defterios: You talked about Foreign Direct Investment, and that is very interesting, you mentioned Greece 2.0, the recovery plan, and here in the morning plenary, we talked about the need to rebuild the social contract. Do you think that in Greece you redefined some things during this terrible challenge with Covid-19 and more specifically I am referring to issues that have to do with the observance of common rules. People were amazed at the level of compliance you set. How, finally, the image of Greece as a destination (for investments) changes, with the security mechanism you have created, the reaction to Covid and the opening to tourism. Can you combine all of these?
Kyriakos Mitsotakis: We did exceptionally well in the first wave of the pandemic. We took action very quickly. I was also surprised to some extent by the way the citizens responded. We explained in very clear terms what we had to do. We needed time that we would use to strengthen the Intensive Care Units and to strengthen our health system. We did not do as well in the next phases of the pandemic, but in general, I believe that Greece will be the winner when the pandemic is over. We managed to quickly digitize the state. I consider it a great success that the citizen can communicate with the state through many different services that are even offered on his mobile phone, reducing bureaucracy and projecting the image of a new Greece, a Greece with more confidence.
And I think that people abroad see clearly what is happening in Greece. If we look at the overall performance of the economy, given the high level of debt, our borrowing costs are at historically low levels. The economy will grow by more than 6% this year, probably much higher. We still do not know the exact data. We managed to open our tourism in a very structured way. We did very well in the tourist season. We communicated our message very clearly.
We have played a leading role in the introduction of the European digital certificate, which has been a huge success, not only in Europe. Many other countries have used this interface for Covid. And we look forward to an even better year, obviously, next year. This year we will probably be at 60%, maybe 70%, compared to the levels of 2019 in terms of tourism revenues, higher than the initial estimates, but next year we will be much higher. And in terms of redefining the social contract, the mandate I had from the citizens was to create new jobs. I want to further reduce unemployment, to offer young Greeks the opportunity to return to their country. We have so many talented Greeks working in the Gulf region, and I am happy when Greeks are active in different parts of the world but I am happier when they return to their country.
And I think for the first time what we see is a brain drain reversal. Many talented Greeks who, for example, spent a decade abroad, now see that it is the right time to return to Greece. Because for us the real limitation will not be the funds. I think there is a lot of interest and I believe that we will also have important announcements regarding the activation of Saudi Arabia in terms of capital. At the same time, the key issue for us remains human capital and how to ensure that we give our young people the opportunity to live a better life.
And one last point in terms of the social contract. I believe that the reason why many foreign investors have turned their attention to Greece, is not only our geopolitical position, what we discussed before, or our beautiful beaches. The main reason that investors have turned their attention to us is the people. We have incredibly talented young Greeks, very well educated with competitive salaries. I expect wages to rise and converge to the EU average.
Therefore, if this is a global battle to attract talent, it is true that Greece was not on the map until very recently. But now we are "returning" with confidence to the wider region as a pillar of geopolitical stability, with strong alliances, with new alliances, with new partners, some of whom I believe we have neglected in the past. We are now very active within the European Union, at the forefront of the changes that need to be made within the EU. See, for example, what we agreed on last July after the Covid pandemic, borrowing a total of € 750 billion as the EU. Greece will receive 32 billion euros as a result of this package. What we call RRF (Fund for Recovery and Durability).
John Defterios: This is a very significant amount.
Kyriakos Mitsotakis: It is a significant amount in objective terms and it is certainly important for Greece. Our job is to implement mature projects with good returns for investors and, at the same time, to add public funds, Greek funds, European funds to private funds, in order to make the most of private funds and to really change the country.
John Defterios: If you allow me. This is very interesting, although we have only a few minutes left. You said that tourist revenues increased by 60% to 70% compared to 2019.
Kyriakos Mitsotakis: Not above the level of 2019, but at 60% to 70% of 2019. However, in August, for example, we were above 2019. So I expect that next year we will cover all the lost ground of Covid and will we could even surpass the levels of 2019.
John Defterios: But beyond that, I always had the vision as a Greek-American, that you could be the financial capital of the Mediterranean, the commercial capital of the region. And now we see Pfizer, Volkswagen, Microsoft, big names that use Greece as a hub. I mean, the design here is that you can really be part of a very big market if you do it right, because you have this triptych of fiscal and banking reforms, labor reforms and tax reforms. Is this your ambition?
Kyriakos Mitsotakis: Yes, if you look at the banking sector, for example, our banks were limited to a large percentage of non-performing loans. We have faced this problem. They are now raising funds on their own. Therefore they have development prospects. If you see Greece as a transit center, if you look at the logistics sector, the development of our ports, it is faster to transport products to Central Europe from Greece than through Gibraltar to Hamburg or Rotterdam. So no one can disagree with geography. But again, to do that, we need political stability, a reform-oriented government with credible partners, a sound fiscal policy and a friendly business environment. It's not nuclear physics, but it takes a lot of work to do
John Defterios: At a glance I see your first Harvard degree, a Stanford graduate degree and that you returned to the Harvard Business School for an MBA. Given that you have been in power for just over two years, what do you want to achieve in the next two?
Kyriakos Mitsotakis: I can tell you that these degrees do not necessarily prepare you to face a pandemic or the challenges of governance in our time. Because you have to govern in practice by doing two things at the same time. You have to face crises, which will not stop arising, that is, to exercise governance and at the same time to think long-term.
I have been Prime Minister for two and a half years. I intend to complete my term. I believe that there are writing samples and prospects for us to win the 2023 elections as well. We will continue with the maximum possible speed the reforms that we have not yet launched. We have a very clear plan for where we want our country to be by 2030, our own ambitious vision, and always on the condition that Greek citizens continue to show confidence in us, I am sure we will succeed.
John Defterios: We only have a few seconds left. On the one hand, the defense agreement with France, the renewal of the agreement with the USA, the alliance between Egypt, Israel, Cyprus and Greece in the Eastern Mediterranean. All this tells us a lot. For an investor exploring the field, would you say that there is no threat from Turkey, that we are safe, that we have the support of our allies?
Kyriakos Mitsotakis: Yes, we are safe. I do not believe that there is a geopolitical threat. And I believe that eventually Turkey will realize that this aggressive stance in the Eastern Mediterranean is not going to lead it anywhere. We have formed our alliances, we have drawn our lines very clearly and I hope that at some point Turkey will participate in a constructive discussion with us to resolve one of the key differences we have, which is the delimitation of our maritime zones. We have agreed with Italy and Egypt on the basis of international law. We are always open to dialogue. We do not accept bullying and we do not give up on our sovereign rights.
John Defterios: The Prime Minister could choose between a ten-minute speech or a more substantive, honest debate. I'm glad he chose the latter. Thank you.
Kyriakos Mitsotakis: Thank you very much.