Brussels, 29 June 2015 (SOURCE: Reuters)
[1. Union of goodwill versus divisive national self-interest]
Ladies and Gentlemen,
When I embarked on my European career – way back in December 1982 – there were just ten Member States. The tenth member had just joined the European family the year before. That country was Greece and I was pleased to see Greece joining what was then still known as the European Communities because, to quote Valéry Giscard d’Estaing, I did not want to see Plato playing in the second division. And I would not want to see Plato playing in the second division in the future either.
We now have a Union of 28 Member States that have managed, after so much effort, so many sacrifices and so many agonies, to reconcile European history and geography. 28 Member States that have managed to merge as many as 19 national currencies into a single currency. My position is that there will continue to be 19 of us and we will be even more numerous in the years and decades to come.
It is this Europe, the Europe of reconciliation and compromise, the Europe that wants to understand others, that has become the great love of my life.
A Europe that is meant to be a place where we patiently and resolutely seek the common interest, not a stage for confrontations between national interests, however justified they might be from the individual or national point of view.
A Europe of convergence between political wills rather than a clash of national self-interests.
Europe can only work if we can manage our differences through a dialogue that tries to be virtuous and must be respectful, and if we organise our individual actions for the good of the whole.
[2. Dramatisation of the differences, national self-interests predominate]
In Europe, no single democracy is worth more than any other. And in the eurozone there are 19 democracies; not one against 18, not 18 against one. For each of these democracies one vote counts as one vote, one people as one people, one citizen taken individually is one citizen.
This is not a game of bluff or poker. It is not a case of one winner and one loser. Either we are all winners or we are all losers.
So I am deeply distressed and saddened by the spectacle Europe put on last Saturday. In one night, a single night, the sense of Europeanness suffered a major blow. Goodwill seemed almost to evaporate. Self-interest and tactical, even populist, gamesmanship gained the upper hand.
After all the effort I have made, after all the efforts of the Commission and the other institutions involved, I feel slightly betrayed because my own efforts and those of so many others, over such a long period of time, have not been properly taken into account.
There was a lot of noise and anger, which drowned out the voices of those who have worked and continue to work day and night, and I am not exaggerating. I am full of admiration for my colleagues who have spared no effort to keep the European family together.
Dramatising the agreements and disagreements triumphed over a common approach to reaching an agreement in everyone’s interest, starting with the interests of the Greek people themselves.
There is talk of an ultimatum, of a ‘take it or leave it’ deal, of blackmail. But who is behaving like this? Who? Where are they coming from, these insults and threats, these misunderstandings and unfinished sentences which fuel the imagination of those who hear them and lead them astray? Even on Friday, after months and months of discussions, we were once again sitting around the table working with patience and determination to secure the best possible agreement. This momentum was destroyed unilaterally by the announcement of a referendum and by the decision to mount a “no” campaign to reject this agreement, and above all by the failure to tell the whole truth. Playing one democracy off against 18 others is not an attitude worthy of the great Greek nation.
This does not help anyone in Europe, and certainly not the Greek people. It is essential for Greek citizens who will be voting on Sunday to see clearly what is at stake.
I have done everything possible, others have tried to do the same. We do not deserve all of the criticism that has been levelled at us. I do not deserve this criticism and nor does the President of the Eurogroup, Mr Dijsselbloem, who has bent over backwards to reach an agreement over the past few weeks. The cooperation between us – between the President of the Eurogroup and the President of the European Commission – was inspired by a common desire to find an agreement.
[3.What we did ]
What is at stake here is the essential spirit of European shared solidarity and responsibility. Other European countries went through very difficult times – Ireland, Portugal, Spain, Cyprus and Latvia – to name only these few countries.
All governments took very difficult decisions; some of them paid a very high political price for their solidarity and their financial support to help the most vulnerable countries.
This is what the order of priorities should be: responsibility before individual biographies, countries before parties.
As a former president of the Eurogroup I have seen first-hand how difficult it has been for these countries to work through the crisis and the social hardship that came with it. But political leaders in those countries showed responsibility and took the necessary decisions, which are now obviously paying off.
You know well that the Greek people are very close to my heart. This is not paying lip service. I tried again and again, and I showed it in recent years that I am on the side of the Greek people and that I place my trust in them too.
I know the hardship they have been through and I have always said that we have to pay more attention to the social fairness of our programmes.
Over the last five months I have been personally involved in the entire process of negotiations – sometimes day, sometimes night. For me Greece’s exit of the eurozone has never been and will never be an option. But I always told my Greek friends that by saying that Grexit is not an option, they shouldn’t believe that at the very end of the process I will be able to present against others a final answer and a final solution to be given to what I have to describe as a primarily Greek problem.
I have explored all the possibilities to accommodate the Greek concerns and to make a deal with the Greek authorities – in the interest, first and above all of the Greek people – while creating, and this is important, at the same time the right conditions for a unanimous agreement with all the other 18 democracies that are lending billions of their taxpayers’ money to Greece.
On our side these negotiations have always been in a true European spirit – based on rules, based on mutual trust. There has never been an ‘ultimatum or take-it-or-leave-it-approach’. Our sole concern has always been and still is to help make a fair and balanced deal.
I have done everything that can be done to facilitate an agreement – on process and on substance.
On process: we have adjusted our working methods to the wishes of the Greek government: this should not be forgotten as it was not an easy thing to be done. No talks took place in Athens, the Brussels Group was created instead of the Troika, we offered continuity in the talks in the face of constantly changing Greek interlocutors and negotiating teams. I worked together with Jeroen Dijsselbloem for talks on a more political level as was the wish of the Greek authorities. This was not left to anonymous technocrats. We had, again and again, talks at the highest political level between myself, I have been elected by the European Parliament after the result of the European election campaign and Mr. Dijsselbloem, who is an elected member, who is the chief of the Eurogroup, we brought all the debates to the political level, not leaving this, as I said, to anonymous technocrats. But this was a highly political debate as it had never been before.
My team and I myself have never been short of determination or patience waiting for the Greek proposals, which often were delayed or deliberately altered.
This also shows our flexibility and our will to reach a compromise also in regard of content. It was about procedures and it was and is about content.
On content: We went very far to achieve socially fair measures that at the same time can support growth and the necessary fiscal consolidation, and which take account of the requests of the Greek Government.
This is certainly a demanding and comprehensive package, but it is a fair one. And I must stress that it has been developed through months and months, days and days of discussions and debates.
Let me clarify a few things:
- There are no wage cuts in this package. And nobody is allowed to give the impression that there are wage cuts in this package.
- There are no pension cuts in this package. No pension cuts in this package.
- In fact, it’s a package which creates more social fairness, more growth and a more modern and transparent public administration.
You should be aware that in many instances, we in the European Commission had to be the ones insisting on the most socially fair measures. I would have expected the Greek government to push this agenda in line with its campaign manifesto.
Let me illustrate this.
This is not a stupid austerity package. Some of the measures of course will hurt in the near term. But the package goes well beyond fiscal measures and proposes a clear way forward. Moreover, this package lowers the fiscal targets and gives more time to the Greek government to achieve them. Compared with the previous deal, the one we had, it is more than 12 billion EUR less savings that are requested from Greece in the coming years. And in fact the Greek government has already agreed to this and welcomed it. Although we had to discuss in a very intense manner amongst institutions, as you know.
By the way, fiscal consolidation does not mean austerity: it means keeping public finances in control while boosting opportunities for jobs and growth. Many Member States have even higher fiscal targets despite having lower levels of debt.
There are, as I said, no wage cuts in this package.This was never, never ever on the table. What is on the table is a proposal tomodernise the wage grid of the public sector. And, for the private sector, we have agreed to review collective bargaining practices. Our only request has been that this should be done in line with the best European practices in cooperation with the institutions and ILO, which are the specialists when it comes to this question.
There are no cuts in the level of pensions in this package. Even the Greek government agrees that the Greek pension system urgently needs further reform to be sustainable. It should be fairer so that everyone contributes to the welfare system according to their means. There is a menu of measures to achieve that, starting with removing incentives for early retirement. The government could also substitute measures with alternatives ones as long as the numbers add up.
I will repeat this sentence: The government could also substitute measures with alternatives ones as long as the numbers add up.
The package of the three institutions and President of the EG means more social fairness:
- by targeting support to the most vulnerable, for instance through a guaranteed minimum income scheme,
- by making sure that the efforts required from everyone are proportionate to their income,
- by targeting cuts in areas which do not affect the average wallets of the average citizens, such as through defence cuts.
- We were asking for cuts in the defence budget and I think we are totally right.
- More social fairness by challenging vested interests, such as removing favourable tax treatments for ship-owners. It took some time if not hours to convince the Greek government – I had to do the job of the Greek government to impose less favourable tax treatment for ship-owners, although this is common sense and in line with tax justice.
- The package means more social fairness by fighting corruption. Ordinary people are not those who are corrupt. Others are. We have to fight against corruption if we want to be credible.
- More social fairness by supporting more transparency and efficiency of the public administration, including an independent tax administration. Who could be against an independent tax administration? This is the normal rule in all European countries. The same rule has to be applied to Greece and the government agrees to that undertaking.
Once more, we were the ones pushing for these elements. Our offers of technical assistance have not been entirely taken up.
This package of the three institutions and President of the Eurogroup – and I have to underline that Mr Dijsselbloem did an excellent job for the last months, an excellent job – also means more growth and more investment. I believe growth can restart soon and fast once there is a deal. But there are no quick fixes to some of Greece’s underlying problems. We need a thorough set of reforms.
- For instance, why is the price of energy and some commodities among the highest in Europe? Because there is a lack of competition and a refusal to tackle vested interests.
- Why is the tax collection so poor? Greece needs a stable tax system to promote investment.
- And that is why I favoured the proposal to increase corporate tax, but not the proposal for a one-off retrospective tax for 2014 profits.
The biggest impediment to jobs, growth and investment at the moment is uncertainty.Uncertainty, which can only be removed by agreeing a deal that provides a credible framework for the Greek economy and people. The confidence effect of a deal, the predictability it would bring, together with the injection of liquidity into the economy from disbursements will restore job creation and growth.
So what did happen? And where are we now?
As you know, the Greek authorities walked away from the negotiation table unexpectedly, I have to say, on Friday night. The negotiations were not finished and the agreement was never finalised. Again on Friday, we were working on further openings and the Commission together with others was proposing to limit the increase of hotel VAT in Greece to 13 per cent instead of 23 per cent envisaged earlier
The fact that our Greek colleagues of the negotiation team were leaving the negotiation table happened at the worst moment.
President Dijsselbloem and I explained to Mr. Tsipras that a deal on these measures could unlock new disbursements of financial aid allowing Greece to meet its financial needs over the next coming months. We also told him that the Eurogroup was ready to discuss debt measures, in line with the Eurogroup statement of November 2012, already this autumn to ensure the long-term sustainability of Greek public finances. We have already discussed with Klaus Regling, managing director of the European Stability Mechanism how this could be done. Mr Tsipras knows this.
And a deal could also have ensured that we, the Commission, could go ahead with a package for a ‘new start for jobs and growth’ package of 35 billion euro to help the Greek economy get back on track.
Vice-President Dombrovskis was spending hours, days, together with all the other Commissioners involved to put together all the elements needed to provide Greece with a growth package of 35 billion euro. This is not only about fiscal consolidation, this is also about pushing forward the growth opportunities for the Greek economy. It is a huge part of the package that the Commission, myself together with Vice-President Dombrovskis, have been proposing to our Greek friends.
You can see we really moved mountains until the very last minute when the Greek authorities closed the door. All elements of a credible and comprehensive deal were on the table.
So I don’t have, unlike recent press speculation suggests, new proposals to make today. I am describing the proposals which were on the table and which were of such a nature that we could have – I have to say easily – reached an agreement at the Eurogroup meeting of last Saturday.
What do the Greek people know about our flexibility and determination to help them? What do they know about the details of our common proposals? What do they know about this latest offer – we were obliged not to influence the Greek vote but to inform the Greek public what is on the table – about this offer we published yesterday? So they put together all the elements that we went through all together with the Greek authorities. What do the Greek people know about all this? And the reason why I am addressing the press and via you the Greek people: they have to know what is the truth. They have to know what is on the table. They have to know all the elements of the debates we had for such a long time together when we were sitting around the same table.
I think that the Greek government knows all these elements and it would be advisable to tell the truth to the Greek people instead of simplifying his own message to a ‘no’ message for next Sunday.
In a democracy – and the Greek democracy has the absolute right to put this question for referendum – the absolute right in a democracy is to ask people to give their advice.
Every citizen deserves the whole story and the truth and they have to know that – on our side – the door is still open.
[4. The time for politics]
So this is not the end of the matter.
It is not true that we have finally reached a dead end, but time is running out. I am almost embarrassed to be repeating these words after so many weeks, but this really is the last minute.
I said after the European Council last Friday, unaware that the Greek Government would break off negotiations, that I would be fighting until the very last milliseconds to find a compromise.
We have now reached the very last milliseconds in which to come up with solutions.
I am still willing, together with the other 18 Member States of the eurozone, to bring about a compromise.
It is not so much a question of shuffling papers back and forth, you know. It is not so much a question of the words to the age-old tune, accusing others of failing to do what ought to have been done at a particular moment. It is not a question of pride, either for the Greeks or for the other Member States of the European Union.
Now is the time when the political class must decide whether they want to serve the people or whether they want to retreat into their final positions; although I would like to say at this point that the other eurozone Member States have gone to great lengths to accommodate Greece, ultimately not paying too much attention to the domestic sensitivities of national public opinion.
All involved have put in a great deal of effort. But to pick out individuals – Schäuble, Dijsselbloem, and so on – would serve no purpose and would not be at all what the people involved would want.
So it would be best not to play that game at all.
[5. Call to the Greek people and government]
This is a highly important moment for the Greek people and for the people of Europe.
It’s time for Greeks to speak up and to shape their own destiny for this generation and the generations to come.
It is time for Greece’s political leaders to shoulder their responsibility, to tell their people what is really at stake, that it will not be easy but necessary; others did it. Ask the Irish, ask the Portuguese, ask the Spaniards and many others. It is a moment of truth.
I will never let the Greek people down – and I know that the Greek people don’t want to let down the European Union.
Greece is a member of the European family and I want this family to stand together.
I will be asking the Greek people to vote ‘yes’, regardless of the question that is ultimately put to them. Indeed, the question may change over the next few days.
If the Greek people say ‘yes’ to the proposals published yesterday by the three institutions, with the agreement of the President of the Eurogroup, so much the better. If the Greek government, in defiance of the truth and the real chain of events, were to ask the Greek people to vote on the proposals by the three institutions which we wanted to discuss at the Eurogroup meeting last Saturday, together with our Greek friends, I will ask the Greek people to vote ‘yes’.
I will ask the Greek people to vote ‘yes’ because their vote will send a clear signal for both Greece and the other eurozone Member States. If the Greek people, acting responsibly and conscious of the national and European role they are playing, vote ‘yes’, the message to the other members of the eurozone, the European Union as a whole and the wider world is that Greece wants to remain with the other members of the eurozone and the European Union.
I will say to the Greeks, for whom I have a profound affection: there is no need to commit suicide because you are afraid of dying. You have to vote ‘yes’, whatever the question put to you. The rest of Europe, the people of Europe do not know what this question will be. You have to vote ‘yes’, whatever the question because responsible, honourable Greek citizens, who are justly proud of themselves and their country, must say ‘yes’ to Europe.
I ELA’DA ÍNE EVRÓPI
I EVRÓPI ÍNE ELA’DA
(Translation: Greece is Europe. Europe is Greece.)