Saturday 07 April 2012

In a SPIEGEL interview, Evangelos Venizelos, the 55-year-old leader of Greece's PASOK party, the largest in parliament, defends his country against critics' views that it is incapable of reform and explains why he thinks the bailout is a good investment for German taxpayers.

by Sven Böll and Julia Amalia Heyer

SPIEGEL: Mr. Venizelos, last year, at the time you left the Greek Defense Ministry to go to the Finance Ministry, you said: "Now I am entering the real war." Is this war now over?

Venizelos: No, the second rescue package for Greece was adopted and the debt was successfully restructured. This was not just the result of my personal efforts, but an achievement of all my colleagues in the euro zone and the representatives of the European Central Bank and the International Monetary Fund. The situation is now more secure, but the game is far from over. A long and difficult path lies ahead of us.

SPIEGEL: You have been active in politics for decades and you were just elected as the leader of the socialist PASOK party. Now you want to become the prime minister who represents the restart of Greece. Is this correct?

Venizelos: I've only been in the Greek parliament for 18 years. The candidate for the conservative New Democracy party, my rival Antonis Samaras, has been a member of parliament since the late 1970s.

SPIEGEL: The family of former Prime Minister George Papandreou has dominated your PASOK party for decades. Will the so-called Papandreou Party become the Venizelos Party now?

Venizelos: No, I do not belong to any political dynasty. I am the head of the Socialists, but the party is not my property.

SPIEGEL: What is your plan for Greece? Where will your country be 10 years from now?

Venizelos: I want my country to be able to determine its fate alone again and to no longer be financially dependent on other countries. We therefore need to change the rules of our entire state and society. The project is very ambitious: We must make sacrifices, but we also cannot fall into despair. The first step is the new elections that will hopefully take place in May.

SPIEGEL: The established parties are now threatened with an electoral disaster. In the last elections in October 2009, Socialists and Conservatives together garnered almost 80 percent of the vote. According to recent polls, the two parties have combined voter support of just over 30 percent. Has the two-party system of the past four decades in Greece come to an end?

Venizelos: We Socialists have five weeks to explain our program and explain to people that we are the only ones who can give the country a comprehensive proposal for its return to normality.

SPIEGEL: So far it looks as though the Greeks neither want to be saved by you nor Samaras. The cost of backing the aid packages was the loss of considerable support -- especially for you.

Venizelos: The country needs someone with experience and determination to make tough decisions. All the money aside, it is important that Greece restore its reputation.

SPIEGEL: In recent months, support for smaller parties that oppose the loan agreement has been growing. Is there a risk that Greece will become ungovernable for you?

Venizelos: Voters will decide how they want to be governed. The country needs a responsible and progressive government, with the political might to lead us out of the crisis. We do not believe in single-party, standalone governments; we believe in having a self-reliant country again. We must not only implement everything that has been agreed with our partners, but on top of that we must implement a consolidated national program of our own for the reconstruction of our country.

SPIEGEL: More than anything else, Greece is a symbol of the crisis today.

Venizelos: Yes, and that is something we need to change quickly. I want my country to again stand for hope, credibility and professionalism.

SPIEGEL: Does your country's bad reputation sadden you?

Venizelos: Of course. But we do not represent the most serious spot in the crisis.

SPIEGEL: What do you mean?

Venizelos: Greece is a medium-sized country in Europe. Our debt accounts for only 2.5 percent of the total of all members of the euro zone.

SPIEGEL: German Finance Minister Wolfgang Schäuble probably views this differently. No other country has kept him as busy in the past two years as Greece.

Venizelos: Wolfgang Schäuble has become a friend of mine in recent months. We both want to protect our countries -- and this naturally has led us to different priorities. Accordingly, our views also differ.

SPIEGEL: Schäuble has proposed postponing Greek elections.

Venizelos: Everyone should respect the sovereignty of the EU countries. The organization of elections is a matter of national policy. Therefore, it does not need pressure from outside. The vast majority of Greeks accept the need for reform and want to keep our country inside the euro zone.

Part 2: 'It Is Difficult to Get Popular Support for the Necessary Reforms'

SPIEGEL: Have the Germans been too rigid during the process of rescuing Greece?

Venizelos: It should always be clear to everyone involved that we can talk abstractly about numbers and reforms, but behind those (numbers) there are always people whose fate is being determined.

SPIEGEL: You served as finance minister for nine months. When you traveled to Brussels, you had to solicit help. How did it make you feel?

Venizelos: Between my first meeting with my European colleagues in June 2011 and my final meeting last month, there was a very long and painful path. The first time, my duty was to restore my country's credibility. The last time it was much easier, because the debt restructuring had been sealed.

SPIEGEL: Nevertheless, you will find few in Germany who believe that Greece has now been saved.

Venizelos: I respect public opinion in Germany, but for me it is the report of the troika that is decisive. It now includes more realistic assumptions than before -- and predicts that our debt in 2020, will only be about 116 percent of our gross domestic product.

SPIEGEL: And that's still a very high percentage, especially considering that Greece has no competitive economy compared to other countries with similar debt ratios. Do you nonetheless believe that your country can be sustainable with these liabilities?

Venizelos: This is what the troika experts say.

SPIEGEL: Do you believe it too?

Venizelos: Eight years is a long time. A lot of things that we cannot predict today could happen by 2020. As soon as Greece gets better, a very dynamic development is possible.

SPIEGEL: The new government bonds that have been issued by Greece since the debt restructuring have already seen dramatic losses in value.

Venizelos: The markets have very short memories. That can change quickly.

SPIEGEL: Within a few years, more than 80 percent of all Greek public debt will be in the hands of creditors such as the European Central Bank and the euro-zone countries. Will they all get their money back?

Venizelos: Of course. The German taxpayer and the German government will benefit from this good investment.

SPIEGEL: You think Germans should be pleased that their government is able to help Greece? Are you serious?

Venizelos: Yes. The German finance minister can borrow money almost for free and lend it at a small interest rate to us. Germany has already earned more than €400 million ($523 million) from us in the past two years.

SPIEGEL: Greece wants to return to the financial markets by 2015 to meet its refinancing needs. Is that realistic?

Venizelos: We have a commitment from all members of the euro zone that we will get the necessary support for as long as we need before coming back to the markets.

SPIEGEL: Why does Greece find it so hard to implement the reforms demanded by the troika?

Venizelos: We had too little time. In the past two years there was too much to do. There was only bad news everywhere -- expenditures, wages and salaries were cut, taxes increased. It is difficult to get popular support for the necessary reforms.

SPIEGEL: But you are also risking the support of your partners if you fail to achieve the most important goals of the reform. The government in Athens actually had a target of €5 billion in revenues from privatization of government-owned companies and assets in 2011, but it achieved only about one-third of that.

Venizelos: The privatization program has to move faster, and it will do so. But we also need the support of the European Commission. In some areas, the Greek government would like to pass faster reforms, but sometimes this aim clashes with European law. This is a big problem in areas like the privatization program.

SPIEGEL: It will also be a big problem to raise the even greater amount of €11 billion through privatizations this year.

Venizelos: We are making progress. For the state gas company DEPA, there are at least 17 bidders from around the world.

SPIEGEL: Are the troika's demands too ambitious?

Venizelos: I am a member of a socialist party, but in most European countries there are conservative governments. I must accept our obligations, especially since Greece has also made mistakes. It is also clear: If we had implemented some elements of the second aid package -- like the (debt) haircut and the lower interest costs -- earlier, with the first program, then Greece would be better off now.

SPIEGEL: If you become prime minister, will you renegotiate the aid package as your conservative opponent Samaras has announced he would do?

Venizelos: There is a quarterly review to determine if the program is working. We are ready to implement the guidelines, but they can also be adjusted.

SPIEGEL: Greece is in the fifth year of its recession. There have been cutbacks, the economy is shrinking and there is even further austerity to come. This death spiral can only be broken by growth. Where will that growth come from?

Venizelos: Some people may have prejudices against Greece. But we will prove that they are wrong.

SPIEGEL: But it is indisputable that reforms are progressing slowly. During the past year, 30,000 civil servants were supposed to get laid off. Only 7,000 are actually gone, and most of those simply retired.

Venizelos: Our aim is to emphasize structural reforms in order to avoid implementing horizontal cuts of salaries and pensions. But in June we must finalize our medium-term fiscal strategy and I can't exclude the possibility that there will be cutbacks in the future to comply with constraints of the aid package.

SPIEGEL: Will the people tolerate that or will they set the streets of Athens ablaze again?

Venizelos: The reforms will be painful, but without the support of the Greek people, we cannot implement them.

SPIEGEL: Is it possible that Greece will leave the euro zone in the end after all?

Venizelos: No, we are currently experiencing the most critical phase in saving our country. If we get through it, then a time will soon come when this question is no longer asked.

Interview conducted by Sven Böll and Julia Amalia Heyer

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