Greece’s Comeback: Prime Minister Kyriakos Mitsotakis on Economy, Security, and Governance

Well, thank you so much for having me. Really looking forward to this discussion.

Well, first of all, thank you so much for your kind words. It certainly was a fascinating and rather bumpy journey, as you pointed out. I've been in power now for seven years, and when the Greek people first placed their trust in us back in 2019, we inherited a situation where the reputation of the country was still to a great extent tarnished by the big financial crisis. I should remind your viewers that Greece during the second decade of the 21st century suffered the biggest decline in GDP in the history of any OECD country. Essentially, the country went bankrupt. We went through three stabilization programs, and our society paid a very heavy price. Back in 2015, we almost crashed out of the Eurozone. So my first mandate when I came into power was to return Greece to a sustainable growth path while at the same time stabilizing our public finances and ensuring that Greece would never again be faced with a situation of significant macroeconomic imbalances. And indeed, if you look at our public finances now, seven years since we made our first commitment, it has been a very interesting story of fiscal discipline combined with very healthy growth. If you look at our debt-to-GDP ratio, it has declined at the fastest pace in the history of any OECD country. By the end of 2026, we probably will no longer be the most indebted country in the Eurozone. And for a country that has been plagued with high debt for many decades, I consider this probably to be my most important legacy: not to inherit to the next generation an unsustainable degree of debt. Of course, you can only reduce your debt as a percentage of GDP if you produce primary surpluses and if you grow the economy significantly. And we've been able to do both. We've created close to 600,000 new jobs over the past seven years. We brought down unemployment from 18% to 8%. When we first came into power, investment as a percentage of GDP was at 11% when the European average was at 21%. We're now anywhere between 17% and 18%. So this has been an investment growth that is bringing in both foreign investment but also mobilizing domestic investment. Of course, there's still a lot of work to be done. My main goal is true convergence with Europe when it comes to disposable income and GDP per capita. So we know that we need to continue to grow the economy at a much faster pace than the rest of the Eurozone for the foreseeable future. But I think we've laid the foundations because unless you have fiscal discipline, eventually macroeconomic imbalances are going to come back and bite you. And for me, restoring the credibility of the markets, ensuring that the capital markets place their trust in Greece knowing that you have a competent government that is not going to succumb to populist temptations to return to a policy of unsustainable handouts, I think is very important and probably a good lesson for other governments which are currently struggling with their own debt and deficit problems. There are quite a few countries in Europe now that are under supervision by the European Commission because they cannot bring their deficit under control. Thank God Greece is no longer one of them.

First of all, I would say the two are to a certain extent connected. If you continue to sustain clientelistic practices, the chances are that you will spend more than you actually have to because essentially you are buying off votes using unsustainable handouts. And I've never believed that this is the right way to do policy. So what we've done is completely reform the software of the government, establish a much stronger center of government at the office of the prime minister, make sure there is proper accountability when it comes to managing the affairs of the government and the coordination with all different ministries, setting very clear annual targets, having very clear reporting systems. All this may not sound like rocket science, but I can tell you that in the business of government, it is not always obvious that you can run a government using these fundamental principles. At the same time, we went all in when it came to the digital transformation of the state. We were a digital laggard. Today we celebrated six years since we implemented our www.gov.gr initiative. What is that? It's essentially the central portal for all government affairs. It has been a smashing success. It has allowed us to cut bureaucracy, to allow people to interact with the state from their mobile phones. It has been truly transformative, not only because we respect people, we don't want them to wait in queues, we don't want them to waste time dealing with bureaucracy, but also because we managed to save a lot of money and uncover various points of corruption which are always hidden in complex bureaucratic processes. I remember during COVID, visiting the States, you had these handwritten vaccination proof of vaccinations, and in Greece everything was done digitally. We have a digital ID. If you want to book an appointment with any physician in Greece, you can do it through your MyHealth app. You just log in and do it. It does help that we are not a federal state. We're a country of 10 million. So being able to run these initiatives from the government center is actually doable. You mentioned the question of agricultural subsidies. We've had perennial problems in terms of making sure that the right farmers receive the right amount of EU money. And it took us a lot of time to actually reform the system. For the first time, I'm confident that we are moving in this direction. It's very complex. You're talking about hundreds of thousands of farmers that have to declare their own plots of land. You have to register the true number of animals and goats that exist on all Greek mountains. And no one really bothered to look at the problem from a purely managerial point of view. But we did. Every transition is painful. In every reform, there are people who are going to be unhappy because they have been used to doing business in a certain way. But this has never been my mantra. Government is about change. It's about driving an ambitious change agenda. And every big change is going to make some people unhappy. For example, one of the big successes of our second term has been going after tax evasion. Everyone would tell you that this cannot be done. We had a perennial tax evasion problem. It's actually pretty common for many other southern European countries. You go to a tavern, you probably won't be issued a receipt. I'm giving the most simple example. Well, this is no longer the case. We used a combination of sophisticated AI analytics, a lot of digital payment systems. So we've tackled tax evasion. This is fair because whoever evades taxes is free riding at the expense of those who are paying their taxes, but it also brought in a lot of money into the public budget. So it helped us with our primary surpluses. And at a time when we're faced with a big affordability crisis, being able to use some of this surplus to target those who are in greater need is almost a luxury. Most European governments are forced to cut their budgets. Now, I at least have some money at my disposal. So it's a question of how I will distribute it in the most efficient way, always respecting social fairness. So we're in a good position, and we've proven that administrative reform and tackling what I call the deep state is something that can be done. Of course, there's still lots of battles to be fought. But I think the overall culture and attitude of Greek citizens towards the state has changed. I think there's a greater respect by the state towards citizens because in the past, it was almost a given that you had to succumb to bureaucracy. You had to play by its own rules. I think we turned the tables. I said, "No, we're going to look at the citizens' problems, and if I can make the citizens' interaction with the state simpler, I should go out of my way to do it because that's the way I respect taxpayers' money, because at the end of the day, they're paying for the government."

I think you're right to point out that the big surge in right-wing populism in Europe is to a great extent driven by illegal migration, and Europe was not open about the scale of the problem. From the very beginning of my term, I took a very tough but fair approach when it came to migration. To a certain extent, it was also a product of our own experiences. Back in March 2020, we were faced with an organized attempt to weaponize migration and to send tens of thousands of desperate people across our border from Turkey, because that was the way Turkey at the time felt it could pressure the European Union. And we made it very clear that this is not going to happen. So we used all means at our disposal to protect our borders. At the time, Europe was primarily focused on what we call secondary migration: what happens if someone enters the European Union, whether he should be in Greece, what happens if he comes to Germany? And I made it very clear to my European counterparts that unless we look at the external dimension of migration, protecting our borders, making sure that it's not the smugglers who decide who enters the European Union, we will not be able to solve the problem of migration because we will simply be overwhelmed by numbers. So we protected our borders. We built a fence on our land border with Turkey. We supervised our maritime borders much more effectively. We've saved tens of thousands of people at sea. I want to be very clear about that.

It is also, but it's also very clear that my coast guard is not a welcoming committee for smugglers. So I will make it difficult for people to come into Greece. And I'm unapologetic about this. And if you're not entitled to asylum, I will send you back. I will do whatever I can to send you back to your country of origin. Europe has changed its approach and has come much closer to this Greek position vis-à-vis migration. We now have a new European legislation. We're focusing on returns. We need to communicate to people who are not entitled to asylum that they should not try to come to Europe because we will do whatever we can to send you back. But of course, for those people who make it into Europe and who are entitled to asylum, we will welcome them. And we've done so for tens of thousands of people. And if they want to choose to make Greece their home, we will welcome them. But this does not mean that we will have an open border policy. At the same time, I think if you're tough on illegal migration, you should also be open about legal migration. So this is the analogy of having a big fence and a big door. I want a big fence for illegal migration, but I want a big door which I control when it comes to legal migration. I mentioned before the figures regarding our employment numbers. We are already faced with employment shortages in the agricultural sector, in basic manufacturing, in services. So why not do bilateral mobility agreements with countries with whom we have a good relationship and bring in these people legally and safely, let them work in Greece, register them, have them pay their social security? It's a win-win proposition. But in order to do that, I need to tackle the problem of illegal migration. So I think we found a decent balance. Yes, we are always faced with challenges. For example, you mentioned Libya. We have a problem in Libya. Now there's a new route that's opening up from eastern Libya to Crete. We're working with our Libyan counterparts. We offer them, for example, to train their Coast Guard. We want to work with these countries. These people should not leave the Libyan shore because they are boarding boats which are completely dangerous and certainly not seaworthy. So we want them not to leave the coast, or if they leave the Libyan coast, I want the Libyan Coast Guard to pick them up and return them to Libya. So we need to work with the countries of transit. We're doing so. I'm still not happy with the results, but we will continue to address this challenge. But if I look at the overall numbers, they are significantly down compared to what they were some years ago.

Well, first of all, I'm happy you mentioned the Draghi report for those of your viewers who don't know exactly what it is. It was an interesting document written by the ex-prime minister which basically highlights what Europe needs to do to become more competitive and points out to the fact that we've been faced with a gradual but quite significant erosion in our competitiveness over the past 20 years. You mentioned overregulation. The truth is that we have too much regulation when it comes to the business environment. This is a big priority for the commission: getting rid of unnecessary regulation. This is a big topic for us and for me. We have what we call the European single market. This is 27 member states. Theoretically, you can do business in all of those without any impediments. In practice, it's not really happening. So let's look at how we can turn this market of almost 500 million customers into a true single market. In the same way that you can do business between California and Nevada, and no one's going to ask you for lots of unnecessary paperwork, the same needs to be true if you want to do business between Greece and Italy or Greece and Estonia. So for example, creating a new legal entity, what we call EU Inc., registering a startup in any European country and being able to operate seamlessly in all of the European countries would be a game changer for our new tech companies. Energy: how can we be competitive in energy? It's a big factor of production, especially when it comes to manufacturing. Europe has a very strong tradition of high-quality manufacturing, but it's been eroded not just by high energy costs, but also by issues of unfair competition. For example, massive imports from China. So all these issues are very much at the forefront of the European agenda. So if you think about Europe, what are our two priorities? The first is competitiveness, the second is defense. These are the two issues we're really focusing on as a European Union, a topic which we will discuss at the next European Council which will take place in a week from now, where we need to take some important decisions not regarding the direction—I think the direction has been agreed—it's really the speed and the sense of urgency that we need to embrace to really move fast in a direction that will make Europe more competitive again. Because, for example, we are big savers in Europe, but we're sending our savings to the US because we don't have what we call a savings and investment union, we don't have capital markets union. If you want to list your company, you're much better off going to NASDAQ rather than to any European stock exchange. These things need to change because it's not just about public money or European money, it's also about mobilizing private capital. And unfortunately, the money right now is not placing too many bets on Europe, and this is something that needs to change.

Look, I started in the US. I was just back at Harvard for my 30th HBS reunion. I do believe that the transatlantic relationship has set the blueprint for a rules-based world order that not only provided stability and growth potential, but also worked well both for Europe and for the US. So I'm not one of those who discounts the relationship in spite of the current turbulence. I'm a realist, but I do believe that there are win-win propositions. For example, when it comes to trade, there has been a rebalancing as a result of the recent tariffs. But at the end of the day, we need to find more opportunities to trade with each other, but also respect our respective rules. I do want the US tech companies to be active in Europe. But if Europe takes, for example, the protection of children and adolescents when it comes to access to social media seriously, these companies need to respect that this is a priority for us. When it comes to defense, President Trump was right to point out that Europe was essentially a free rider when it came to defense. Not Greece, because little Greece always spent 2% of our GDP on defense because of our special circumstance with Turkey. But we are spending more on defense, and if Europe builds its own strategic autonomy, this is going to be good for NATO. The US shouldn't be threatened by that. And yes, we will also develop our own domestic defense ecosystem. And if we spend more on defense, NATO as a whole is going to be stronger. So I do believe that at the end of the day, there is a profound bond that ties us together. And when we look at the big issues regarding global governance, the big challenges, the benefits and costs of AI—AI at some point cannot be just a wild west of innovation without understanding that this is a technology that will have profound implications, which unfortunately I think the way the US is looking at it. So we'll continue to try to work with the US both as a European but also as a Greek. We have a very strong bilateral partnership with the US which I respect, that goes beyond defense and security. And I also believe that when it comes to issues such as managing China, especially the fact that China now has 30% of the world's manufacturing capacity and has essentially the ability to destroy industries across the globe and certainly in Europe, this is a topic that we need to take very seriously. We cannot just allow our industrial base to be completely annihilated simply because we're in search of always the cheapest product, especially when it comes to unfair trade practices. So there's a lot of thought that needs to go into this. And I'm speaking here as a European who is a free trader. Greece is a shipping nation; we control 25% of the global merchant ships. We live off shipping to a great extent. But free trade does not mean trade without any rules, and certainly establishing some sort of level playing field is important for trade to properly function.

Well, first of all, I think that the invasion of Ukraine by Russia was a watershed moment for Europe. War returned to the European continent. We thought that this would never happen. For those of us who grew up with the fall of the Berlin Wall, it seemed completely inconceivable that we would ever be faced with a war that is longer than World War I and with a huge number of casualties. So it was a reality check for all of us, especially for us Europeans. And the fundamental premise that you cannot change international borders by force—this was one of the lessons of World War II. And if this happens, you need to defend yourself and you need to support the country that's defending itself. And we did that in Europe, and of course the US also did so, and rightly so, because at the end of the day, we don't want to return to an environment where might makes right and where the strong do as they wish and the weak succumb to the wishes of the strong. So the fact that Ukraine is currently in a position to defend itself, has developed completely innovative technologies with a lot of European support both military and financial, I think is an important statement to any aggressor. And in that sense, Ukraine has put itself in a position to be able to make it very clear that this war has a big cost for Putin. The more he continues, the bigger the cost, because it doesn't seem to me that there's any real progress on the military front. So I think this was an important precedent, and again it forced us in Europe to take our security seriously. And when I speak about security generally, it's not just Ukraine; it's the Middle East, it's Africa. We are in the southeastern corner of Europe. We are very concerned with what's happening in the Middle East. If there's a crisis in Sudan, which there is, if there's a war or a humanitarian crisis, inevitably it will spill over into Europe through migratory flows. So becoming more pragmatic and more realistic about the fact that we live in a complicated world and developing our own capabilities to even deploy hard power if necessary, I think it's an important stepping stone for Europe. For example, we have ships in the Red Sea protecting the sea lanes against Houthi attacks. Greece has a ship there. These are the sort of initiatives that we should be able to support. If ever there is, and hopefully there will be soon, some sort of solution, and if there's a need for a peacekeeping—not a peacemaking, a peacekeeping force—we should be able to step up. If our Arab friends are attacked, we should be able to support them materially, not just say nice words. Being able to really step up and say, "Okay, we stand by you," because at the end of the day, this is not just a question of principle. This is also in our self-interest to do so. So I'm really pushing Europe to take its security more seriously. This will require committing more resources. And it should not just be national budgets. It could also be European money that could be directed towards projects of common interest. Security is the quintessential common good. So if there are European projects of common security that make us all safer, they could be funded by the European budget. I would say they should be funded by the European budget.

Well, Greek-Turkish relations have always been complex. And I'm looking for a functioning and why not a constructive relationship with Turkey. We're destined by our geography to live side by side. This is never going to change. Having said that, it is true that Turkey over the past decade has become a revisionist power when it comes to its projection of its sea ambitions in particular. And this is something that collides with international law. So all I've said is make it very clear that Greece's sovereignty and sovereign rights will never be challenged. And our sovereignty and sovereign rights emerge from international law and from international treaties, and these cannot be questioned and should not be questioned under any circumstance. We have one big difference with Turkey, which is the delimitation of maritime zones in the Aegean and the Eastern Mediterranean. If Turkey has other claims, we don't recognize them. They are completely unfounded, and no Greek prime minister would ever be willing to enter any discussion or any negotiation regarding these claims. I've made these points very clear to President Erdogan, with whom I have a functioning and I would say good relationship. I've seen him, met him many times, and I'd say that over the past two to three years there has been a reasonable détente. We see spikes sometimes of activity and rhetoric. We saw one over the past month. I hope that it can again be contained, but I'm also not naive. I will strengthen my armed forces. I've done so systematically. They're probably in the best position that they've ever been. We need a strong deterrence capability. We need to invest in qualitative superiority wherever we can. And of course, we need strong alliances. Not just we're members of the European Union. There is a mutual assistance clause in the European Union treaties which I want to operationalize and make it real, not just something we talk about theoretically. We have a very strong partnership with Israel, we have strong partnerships with the Gulf countries. So strong economy, strong defense, and strong alliances, but at the same time a functioning willingness to engage with Turkey but setting very clear red lines in terms of what can be discussed and what cannot be discussed seems to me to be the right approach in managing Turkey.

I think the relationship has never been stronger, and again, this is a relationship that transcends governments and administrations because at the end of the day, it is founded on two pillars. The one you mentioned: there is an amazing Greek-American community, which is a natural bridge between our two countries. And the second is common security interests, especially when it comes to the Eastern Mediterranean. And that is why Greece has lots of friends across the aisle in the US Congress. This is a bipartisan approach which is not just shared by the administration. And we will do more. For example, I mentioned shipping. If the US wants to export more LNG, which is a big priority for the current government, and Europe wants to buy LNG, who's going to transport this LNG? Again, 25% of the global LNG ships are owned by Greeks, so this gives us leverage. If the US wants to import natural gas into Europe, why not use Greece as an entry point? We've done so. We have this concept of the vertical corridor supplying our northern neighbors and going up to Ukraine. So if you want to focus on IMEC, this notion that there's a connection between India, the Middle East, and Europe, Greece is your natural entry point when it comes to continental Europe, even when it comes to sheer business opportunities. We're open for business, and there are lots of interesting investment opportunities for American capital to invest in Greece. So this is a very broad relationship that goes beyond security and defense. But I do want to focus on the Greek-American community because for the first time we gave the right to vote by mail, which didn't happen in Greece before. It's done for the first time in the next election. So we also want the Greeks who have a right to vote to participate in our elections. They will be able to do so for the first time in the upcoming 2027 elections. And of course, historically, you'll be celebrating your 250th commemoration of the Declaration of Independence. But just look at how much the founding fathers were influenced by ancient Greece.

Oh, I should read this. Who has written it? Let me see.

There you have it. But then, of course, our founding fathers were inspired by your independent struggle back in 1821 when we fought for our own independence. And it's interesting that our founding fathers were actually communicating. There are letters sent between Jefferson and Korais, who was our intellectual brainchild behind Greek independence. So it's a fascinating story, and of course we fought together numerous times in two wars. America was there to help with our reconstruction after the Second World War when Greece was ravaged also by a civil war. So these are very strong ties, and we need to speak about them openly and leverage them.

Well, my path was rather bumpy in the sense that I come from a political family. My father was Prime Minister. I was always fascinated by public service, but at some point rather disappointed by the fact that my father lost an election, I decided that I wanted to pursue a career in the private sector, and for almost a decade didn't want to hear anything about politics. So I cut my teeth in business and in venture capital. It was a fascinating lesson for me. At some point, I realized that sitting on the fence and just expressing views about how your country can change is not a very constructive approach. So I did take the plunge, and at some point I decided against the odds—I was a complete outsider—to run for leader of my party. I ended up winning, and ended up winning three national elections. So a lot of people changed my party, made it more of a big tent party, making it very clear that I am a modernizer and I will seek change rather than continuity. And I'm still so fascinated when I sometimes look back. It's been a long journey. Time does fly when you are in this job, but the energy is there to continue because you know that it's actually quite easy to backtrack as a country. So I will be running for a third term. There are no term limits in Greece, and usually there are no term limits in parliamentary systems. But I do want to run for a third term because I still think there's work to be done and because I want to make sure that the changes we put in place are going to be irreversible. We've sacrificed a lot as a country. We've made great progress, but there are still issues. We are still faced with a big affordability issue as we speak today. There are still people who are struggling, lots of reforms to implement. You need to be comfortable with the fact that there are so many problems you have to deal with. You need to prioritize. But I think we got the big things right in Greece: strengthen the economy, strengthen defense, digitize the state. These are important reforms that we can build upon. Every leadership story is different, but I think that what unifies them is a profound desire that you can make a change and basically accept the burden of responsibility with grace because you have to be responsible and you have to take decisions. Our job is to take decisions on a daily basis. Tens of decisions every day. You don't want to get them all right, that's for sure. But the one thing you cannot afford is not to take decisions in our job.

Well, thank you so much for offering me the opportunity. I'm a big fan of your podcast. So I hope that your viewers enjoy this.

Thank you so much. Take care.