Heads of state, heads of government, dear guests, and especially Simon, thank you very much for coming. Thank you very much for putting on this amazing forum as usual, which I think always brings together some of the most important decision makers in Europe and from around the world. And I think we're all very thankful to have you put this on every year. The discussion that we have today, which I'm very excited to be moderating, does not only have two of Europe's most important decision makers, but it also comes at a very decisive time for the European continent as we have the conflict between the United States and Iran and the massive effects that it has on the global economy, on the European economy. And it comes just hours before an informal European Council meeting. Antonio Costa, we're very happy to have you here and I think we need to dive right into it. How much of a threat do you think this conflict that goes on right now with Iran blockading the Strait of Hormuz, the United States blockading Iran's blockade, energy stuck, natural gas stuck? How much of a threat is that to the citizens of Europe?
Well, first of all, thank you very much for this invitation. It is a great pleasure to share the stage with my dear friends Kyriakos Mitsotakis and of course we are living a very challenging moment. This war is first of all a challenge for international law and it's more than ever important to uphold international law because the alternative to international law is just chaos and we need to avoid that. The second threat is the global economic impact of this war. It's clear that the blockage of the Strait of Hormuz and the attacks against civilian facilities, namely in the energy sector for essential energy production or storage, is a huge risk for our global economy. That's the reason since the very beginning the European Union is calling first of all everybody to de-escalate, to restrain, to obtain a ceasefire, not a short ceasefire but a lasting ceasefire, in order to give place for diplomacy to address the deep issues, the nuclear issues, because never ever Iran can have a nuclear capacity. We need to address also the ballistic missiles and we need to ensure that Iran stops supporting their proxies which are a threat for their neighbors, for our countries, and also to ensure the freedom of navigation. This is a key principle for international law and we need to respect and ensure this. On the other side, we need to stop the war in Lebanon. President Aoun and his government have taken a historic decision to ban the armed activity of Hezbollah. We need to support the Lebanese authorities to take effective control of their territory, to effectively disarm Hezbollah, in order to ensure a peaceful situation in the Middle East.
And this is our position and we need to continue our diplomatic activity to pursue these different objectives. Prime Minister Mitsotakis, you very early on understood that the war in Iran was a serious threat to the economies of Europe. You already took measures to make sure that gasoline prices here in Greece don't go out of control. How big a threat is this specifically for Greece? Because we have the tourism season coming up. I saw yesterday that Lufthansa canceled 20,000 flights, the German national carrier. But then also in the field of agriculture, for instance, energy security.
I think we are faced with potentially a crisis of very significant proportions. It is a question of time. If the blockade of the Strait of Hormuz continues for a significant amount of time, we will have physical disruptions in the supply of crude oil and products. We will have significant increases in the prices of energy. We will have shortages in fertilizers and we will most probably have a spike in inflation and a significant reduction in our growth rates. This will affect all European countries. Greece may be doing better than most European countries these days, but we are not immune to a crisis of this magnitude. So I would agree with Antonio that the number one priority is to get to a permanent ceasefire that will essentially return us to the status quo before the war because the Strait of Hormuz was open. We are a leading maritime nation. We cannot accept the notion that an open waterway will be subject to any tolls or any payment. This is something which would set a catastrophic precedent. So we need to put all our efforts in supporting a diplomatic solution. But we also need to be ready, and this will be discussed tomorrow, for a possible worst case scenario. We saw what happened during the Ukraine war. We saw how dependent we were on Russian gas. I think this crisis is also another opportunity to recalibrate our strategy regarding strategic autonomy and our resilience on European energy. We have placed a lot of emphasis and we are leaders in decarbonization, but this cannot be the only goal. Security of supply, sustainability of our industry needs to be right up there in terms of our priorities. We talk a lot about reducing the amount of CO2 we emit. We don't talk about the availability of jet fuel. This is a real issue these days. So I would urge us all, and we've had these discussions, to be much more pragmatic and to have a plan B in place in case this crisis is prolonged, because the financial impact is going to be significant and no member state can support our societies indefinitely without some sort of European support.
How bad can a worst case be? Because I saw that the EU energy commissioner said it's going to be a very tough summer for Europe. What are you bracing for? What are your planning for the worst case scenario? Also, of course, putting together all European Union nations.
But we experienced in the last years the impact of two dramatic shortages. The first one after COVID, the second after the full-scale invasion of Ukraine by Russia. We experienced the dramatic effect and impact on inflation in our countries. Now we are facing a search. The Commission presented today a package, a toolbox with several kinds of tools to be used by the member states in order to try to control the prices on energy. We will discuss this tomorrow in the informal council. I cannot anticipate now, but I think the main message that we should understand is that we are an economic region that is a full importer of gas and oil. Then the only structural solution for Europe is to develop homegrown sources to produce energy. Renewables, nuclear, doesn't matter. We should be technologically neutral. But we must produce our own energy. If not, we are always exposed to risks of disruption, either because Russian oil doesn't come anymore or because we have a problem in the Strait of Hormuz or we have a problem somewhere else. Then the only way to ensure our strategic autonomy, to be independent, is to invest more and more in our homegrown energy. It is not only a matter of environment, first of all now it is a matter of security, our own security, and that must be one of the main priorities.
And this is something that's important, Mr. Prime Minister, in many ways because it's not just that European countries need to meet their energy demands. They need a lot more energy than they're using right now. I think actually the Trump administration has understood that especially with artificial intelligence becoming bigger and bigger, there's going to be a lot more necessity for a lot more energy. Right now Europe is already facing in many countries, I wouldn't say an energy crisis, but certainly energy is not as easily available as it probably should be, especially if we look at Germany, we look at some other countries. What do you think is the way forward there?
Well, first of all, let me use the Greek example, which is also quite similar to Portugal, as maybe a case study of an energy mix that actually works for Greek consumers. We took a decision seven years ago to move away from coal almost completely, primarily for environmental but also for cost reasons, because coal is becoming very expensive when you add the CO2 emission costs. We moved towards an energy mix where we rely on renewables and natural gas as base load power. We are now one of the leading countries in terms of electricity production from renewables. You saw quite a few windmills on your way to Delphi. So the combination of wind, solar, and hydro allows us now to have significantly lower prices than many of our neighbors and to turn Greece from a net importer of electricity into a net exporter of electricity. Of course, in order to export more and to import more when we need it, we need more grids. This is a challenge. The truth is, and I've been very blunt on this topic, that the European energy market is completely fragmented. We do not have a unified energy market in Europe. The countries that are producing cheap energy don't necessarily want to share it with others, and we need to overcome this blockage. But at the same time, what Antonio said is incredibly important. If we are going to import natural gas, and we will need to do so, let's make sure we do it from reliable partners. In Greece, we have placed a bet on turning Greece into an entry point for liquefied natural gas primarily from the US and to use what we call the vertical corridor to supply countries to our north and to be also a provider of energy security. My last point, we need to go big on nuclear, and I'm saying this with...
That was going to be another important question. I think do you feel that in the past years, and I want to ask you this as well, Mr. President, that the discussion about energy in Europe when things were going great in all European countries was too ideological?
It was completely. We've seen this at the council. We lost years discussing the famous taxonomy question and it was a moral discussion. We don't like nuclear because it's bad. We don't like natural gas because it's almost as bad as nuclear, although we all recognize it's much better than coal. But look at Germany now. Shut down its nuclear industry, lost the know-how, and is burning coal. It will burn coal at least until 2036. It's wrong from an environmental point of view. It's wrong from a CO2 point of view. From an economic point of view, it doesn't make any sense. So I think when you look at the clean tech industry in Europe where we can still be competitive, we need to double down on those industries where we can actually create homegrown strategic autonomy, and we need to do it in nuclear. I'm speaking as a country that has no nuclear production and it will take us a lot of time to discuss whether we will become a nuclear country. But when I wear my European hat, I fully recognize that we need to leave these ideological debates behind us. We need to be ruthlessly pragmatic and we need to understand that nuclear will be part of the solution, and we'd better grow our own technology rather than import it again from the US or from Korea or from any other country that has nuclear know-how.
Do you believe that's happening? Do you think that the discussion has moved beyond that because Germany still isn't going back to nuclear? They're still burning a lot of coal.
We have already overcome this phase. Now we accept in the taxonomy the principle of technological neutrality and each member state is free to choose their own energetic mix. The goal, we have a common goal to decarbonize our economy, but it is not only about the production of energy. We need to invest more on grids to increase interconnections, but also to have smarter grids because smarter grids are now a very important way to reduce consumption, to have a more efficient use of energy. We need to continue to invest to increase the efficiency of the use of energy. I want to go back to the topic of Iran because as both of you know, right now the United States, Iran, and Pakistan are trying to put together another meeting in Islamabad. There were some hiccups but the ceasefire was extended. Isn't Europe completely out of this process right now? Isn't Europe sort of looking at this from the outside with no way to influence how things move forward? Which is a dangerous situation when you're so dependent on the world's energy markets.
I want to go back to the topic of Iran because as both of you know, right now the United States, Iran, and Pakistan are trying to put together another meeting in Islamabad. There were some hiccups but the ceasefire was extended. Isn't Europe completely out of this process right now? Isn't Europe sort of looking at this from the outside with no way to influence how things move forward? Which is a dangerous situation when you're so dependent on the world's energy markets.
No, I think Europe is doing what it should do. When Cyprus was attacked by Hezbollah, immediately Greece led a European mission with France, Italy, Spain, the Netherlands to defend Cyprus. We have now a coalition of the willing led by France and the United Kingdom to ensure in the future the freedom of navigation in the Strait of Hormuz. All of us are very engaged in the diplomatic efforts to try to de-escalate the situation and to support our partners. Last week, for instance, with the support of Prime Minister Kyriakos Mitsotakis and the Greek air force, I had the opportunity to visit Saudi Arabia, Emirates, and Qatar to talk directly with the leaders. We are permanently in contact with the prime minister of Pakistan and supporting his efforts to mediate these conflicts and try to convey the message to Iran and to our allies in the United States in order to achieve a permanent ceasefire and to give chance for diplomacy to address the deep issues on this.
Wouldn't it be more important though for Europe to be actually sitting at the table? Because if we look at the first Islamabad talks, it was obviously the United States, Pakistan, and Iran, but then it was Russia, China, Qatar, and Saudi Arabia. Europe was not there. Mr. Prime Minister,
Well, let me first of all point out that our first priority was to ensure that we protect the territorial integrity of all our member states. What happened in Cyprus was a litmus test for many member states. We for the first time experimented with operationalizing Article 42, paragraph 7 of the European treaties, which is our mutual assistance collective clause. Many European countries, we were first for geographic and historical reasons, supported Cyprus by making a military deployment. What we want to do now, and this is certainly going to be a Greek priority, is to say okay, if this were to happen again, how could we do it better? Because this would be a clear indication that we take our strategic autonomy seriously. Second, we are building, and I think we've done a lot of work also under the leadership of Antonio, in terms of building strategic partnerships with the Gulf countries. We've done so bilaterally. We have strategic partnerships with these countries. We supported them in times of great difficulty because we consider the Gulf countries to be very important in terms of our regional footprint as a European Union. In terms of the negotiations themselves, although we share some of the goals of what happened, this was not Europe's war. So at the end of the day, the parties responsible for negotiating the end to the war need to be the parties that are actively involved. We have to be realistic in terms of what we can and what we cannot do, but we are also ready to support and to participate in any initiative where we can add some real value. On the question of navigation, for Greece this was a priority at the Security Council. I chaired the Security Council months ago and my topic was freedom of navigation. I could not imagine at the time that this would be so relevant these days. Making sure that we have an active role to play when it comes to this issue, especially as Europe being not just because of Greece but because of other countries a global superpower when it comes to navigation, that is a topic where we could play a role if there ever were to be a need for a multinational force to patrol a ceasefire. If this were necessary, we would be happy to do it. We did it in the Red Sea. Greece was leading operation to protect maritime transport from Houthi attacks. If I want to be honest, am I happy with the overall participation of European countries? No, we could do more. That's why we are also encouraging our European countries, if you want to take strategic autonomy seriously, this is not just about the leadership of the union. It's member states that commit the resources. If we can have 10 member states sending ships, it's different than having three. A lot of it also falls on our responsibilities. If we really want to be at the table, we also have to walk the walk. We have to be present and demonstrate to all the actors in the region that we have value to add.
If you allow me to add one point because in my visit to the Gulf,
I understood that the Gulf states are really frustrated because when they were attacked, few people effectively sent equipment or people to protect them. But they are very grateful, for instance, to France or to Greece. Because Greece, for instance, has military equipment in Saudi Arabia and this military equipment was used to protect the Saudi Arabian facilities. This is something that the Gulf states understand very well and this is one reason why they want to strengthen the relationship with the European Union, not only on economics but also on security and defense. Because we need to understand that now in this very uncertain world, we need to work more, we need to be closer with like-minded partners and reliable partners.
So do I detect a criticism of the United States there? Because until now these Gulf nations have basically relied on the US for their security.
No, I'm not talking about the United States. It is not up to me. We have here two ambassadors of the United States, the ambassador to Greece, the ambassador to the European Union. So I'm just talking about Europe and what Europe is doing. Because normally we listen too many times that Europe is out. No, we are present when and where we need to be present. In this complex situation, we didn't start this war. We didn't participate in this war. We were not informed about this war. But when this war came, we acted to protect first of all our member states, second to be supportive with our allies and our partners in the Middle East and in the Gulf region. And we are engaged to try to control the dramatic side effects of this war. We cannot underestimate the effects of this war. If you want to say something.
And we cannot underestimate the effects of this war.
Yeah, I just want to say that again this is a very complex situation. Of course there is the conflict itself, but there are other areas where we can and should be more involved. Lebanon. We need to support, and we've done so. We just sent another plane with humanitarian aid and many other European countries have done so. We need to be very active in Lebanon. If we can be active in brokering a permanent peace between Lebanon and the United States, this will be to the benefit of the region. Gaza and the reconstruction of Gaza, with the position of Greece but also of the European Union, the end point being a two-state solution, the protection of Christians in the broader region and in Syria in particular where we have quite a few reports of Christians being persecuted. So there are areas where we can be active. We have both the connections and the know-how to be possibly more effective. We do this also in cooperation with our US allies because, in spite of everything that's been said and in spite of whatever turbulence and bumps there may be down the road, I remain a believer in the transatlantic partnership. If you look at the strategic challenges from the east, we will need to find a way to work together more effectively.
What sort of levers do European countries and does the EU actually have though to make a difference on the ground in the Middle East? If it's a situation in Gaza, if it's a situation in Lebanon, how much pressure can European countries, can the European Union actually apply to make a difference? Because I mean, look, what's happening in Lebanon has been going on for a very long time. What's happening in Gaza has been going on for a very long time, and the situation in Iran, of course, is still not fully under control.
On Thursday, we have a meeting with all the European leaders, with President Aoun, with President Cece, with President Al-Shara and the crown prince of Jordan precisely to define how we can work together better. The European Commission immediately approved very strong humanitarian support to Lebanon. Four days after the war started, President Felani and myself met by VTC with all the leaders of the Gulf States and Middle East countries in order to work together with them to support them by concrete measures.
And we can do it by being practical. As much as I like these fascinating discussions, well, you can have both, right? You can have a fascinating discussion and be practical afterwards. Lebanon needs humanitarian aid and the Lebanese army needs equipment.
