Prime Minister Alexis Tsipras’ speech in the greek Parliament concerning the mandate to conclude the negotiation
Ladies and Gentlemen Members of Parliament,
We have reached a critical juncture and, perhaps, you will allow me to take a more personal tone today.
Since being elected Prime Minister – in these times that are even more critical than those of the country’s post-dictatorship history – I’ve been guided solely by my conscience, to defend our people’s just demands and national interests.
For the last six months I have done everything that was humanly possible, under difficult circumstances, with threats and blackmail ever-present. However—and I think that no one can dispute this, neither friends nor opponents–in these circumstances and difficult times, I’ve taken risks, I did not give up, I did not consider the political cost, I did not opt for hasty compromises simply to ensure staying in power.
Many will say, perhaps, that what I’ve achieved has exceeded expectations. And I’ve done so while always honoring the truth, as I’ve understood and understand it—all with the generous support of the majority of the Greek people during this difficult fight.
Today, I want to be fully transparent with you, to tell the truth – at least as understand it. Everyone, but especially the Greek people who are watching, can be the judge—and they can assess what I’m saying, calmly and with composure.
There can be no doubt that for the last six months we have been at war, we have faced tough battles with difficult odds, we’ve had losses, but we’ve also gained ground, as well. We’ve accomplished much more than anyone could have imagined. Now, however, I feel that we have reached a very critical moment: From this point onwards, we’re facing a minefield—a fact that I can’t ignore and that should not be hidden from the Greek people.
During these past months, we have been strenuously fighting to obtain the best possible outcome despite the unprecedented economic asphyxiation. When I’ve been asked whether we have made mistakes during the course of the five-month negotiation, the only honest answer is, yes. Yes, we made mistakes. No one is infallible. I believe, however, that there is no precedent in modern European history of a country that is practically on the brink of bankruptcy, to negotiate with such persistence and dignity. To negotiate as an equal among equals, to restore the lost political parity between Greece and the other Eurozone countries.
Now, we must decide to not sacrifice this parity on the altar of extreme conservative forces. Extreme conservative forces who have wanted exactly this result, and are actively pursuing this–those of you who watched yesterday’s meeting in the European Parliament witnessed this dynamic: an ideological and political conflict, and the desire to, above all, do away with a government that they don’t like–and its people, which they consider a nuisance, who selflessly insist on supporting their government, despite having to bear financial asphyxiation.
We decided, therefore, to proceed with the responsibility and gravity necessary under the current circumstances, to prevent a political Grexit with an economic pretext.
I am not here to mask reality with excessive rhetoric. The loan agreement that will be presented to the Eurogroup on Saturday includes several measures that differ considerably from our pre-election commitments and policy statements, from what we believe is necessary for the recovery of the Greek economy. However, we must compare the alternatives before us – and here, nothing is a given, the negotiation is ongoing – the current proposal versus the one that we received fifteen days ago.
On June 25th, we received an ultimatum from the Eurogroup. This ultimatum only provided for harsh measures without any breathing room or prospects, without adequate financing, without any commitment on debt restructuring. It would last for five months, without adequate financing, and would include four evaluations within five months without a commitment on the debt issue.
We turned it down. And I think anyone else in our place would have done the same. We turned it down and asked the Greek people to give us their decision. Our intention was not for this choice to lead to a banking holiday. While the governing council decided to propose a referendum, we submitted a request for the program’s extension to allow for this process to transpire smoothly. This did not occur. It was not our choice.
Despite the closed banks, despite the enormous social and financial difficulties created, the Greek people made a tough, brave and historic decision that surprised many. They rejected the ultimatum. They did not grant a mandate for rupture. Their mandate sought to strengthen the negotiating effort for an economically viable agreement.
And I never hid my intentions or the truth from the Greek people. I did not ask for a “No” vote as a mandate to leave the euro, but as a mandate that would strengthen our negotiating position. I even personally pledged, prior to the referendum, to do everything in my power to pursue a better deal as soon as possible, even within the first forty-eight hours. The Greek people voted with these terms in mind last Sunday, and I am not here today to do something other than what I promised. And I am doing what I promised.
I did not deceive the Greek people nor the Council of the political Leaders, which I had asked to be convened immediately after the referendum, when I requested – and indeed we all committed ourselves to – a specific framework for a viable agreement, a necessary step to move beyond divisions – such is the nature of a referendum – to political and national unity.
To me, the “No” vote represented a mandate for a better solution, for a better deal, for the dignity of a large portion of the Greek people – for the thousands of people who have experienced poverty and indignity all these years. I also perceived the “No” vote as a vote of confidence, as well, in the Government and its efforts. And the time has arrived to take stock.
At the Council of the Political Leaders on Monday, we set three conditions for a sustainable agreement: adequate financing, a strong investment package, substantial commitments for the necessary debt restructuring, and in return we committed to reforms with the least possible recessionary cost and with fair burden-sharing.
What do we have before us today? What possibilities and what difficulties lie ahead?
We have the prospect of adequate financing for the country’s mid-term obligations for a period of three years.
We have the promise of a strong growth package of over 30 billion euro – 35 billion euro – reserved for frontloaded disbursement and initiatives to combat unemployment.
And for the first time, we have a serious and substantive discussion on the necessary restructuring of the debt on the table, and we are no longer the only ones who are requesting it: the IMF has publicly admitted that is it necessary, as well as the President of the European Council, Donald Tusk, who publicly stated yesterday that the necessary restructuring of the debt could be a compensation for reforms.
We must be honest, though, that the reform program that we are requesting to implement is a difficult program, with better terms on certain points – several points – than those of the ultimatum a fortnight ago, but a difficult program, nonetheless.
But for the first time in six months we have on the table– and I repeat, we cannot be certain of the outcome– the chance for an agreement that can put a definitive end to talk of a Grexit, and hence, provide an fully positive signal to the markets and to investors, that with guaranteed long-term financing and debt reduction, they can once again trust the Greek economy. This will give us the chance, the opportunity, to offset the possible recessionary effects of the tough measures.
Allow me to highlight five points from the Draft Agreement that we are asking the Parliament today to authorize the Minister of Finance to negotiate and sign.
First, this agreement will lead to an exclusively European program, consisting solely of European support mechanisms. This means that the IMF will not be a party to the agreement. Its possible involvement will be limited to technical support. That means that the troika as we knew it, will no longer exist.
Second, the duration of the new agreement, as I mentioned earlier, will be three years. It provides time and space to stabilize the economy, to put an end to Grexit speculation, and allow the country to gain market trust. I want to point out that in the ultimatum we received fifteen days ago, the duration was five months. Now, there will be uniform prerequisites for the entire Program’s duration and for these difficult measures that we are currently discussing. Thus, we will not be meeting again after five months to discuss new ones.
The third point involves lower primary surpluses through 2018, which will be tied to the state of the economy; we are doing away with a requirement that only fueled austerity, namely, very high surpluses in the absence of economic growth. You will recall that under the previous program, we had committed to primary surpluses of 3% for 2015, and 4.5% for each year after 2016. This means that for 2015-2018, we had to produce primary surpluses of 30 billion euro, while now we have an obligation of approximately 17 billion. Therefore, the budgetary measures we would be forced to adopt would be much higher than the approximately 7.5 billion euro currently needed. The additional fiscal space resulting from the lower primary surplus is approximately 13 billion euro for 2015-2018. This is the fiscal benefit of -I do not want to whitewash things – the difficult proposal that we have on the table.
Fourth point. With the loan from the European Stability Mechanism [ESM] we will repay the Greek bonds held by the European Central Bank totaling 6.8 billion, and maturing in July and August. This conversion of short-term to long-term debt, with lower interest rates –the ESM provides for such an opportunity, lower interest rates and possibly of a rollover of repayments, which I will address later on– is the equivalent of the debt being restructured. Therefore, the assumption of the country’s total debt and financial requirements by the European Support Mechanism de facto provides possibilities of converting short-term debt to long-term debt. In this sense, it would allow for the country to–at least partially–avail itself of the European Central Bank’s quantitative easing program come September.
Fifth point. There will be no additional fiscal measures as a consequence of the economic impact of the bank holiday and the imposition of capital controls.
And of course, for the first time, there will be a sincere discussion about the key issue of the debt sustainability. Obtaining a substantial commitment from the partners to restructure the overall debt with the European Stability Mechanism, so that it can become serviceable and sustainable, is on the table; a substantial commitment and a time frame for starting this discussion and making a final decision.
Ladies and Gentlemen Members of Parliament,
I want to reiterate that the purpose of my speech today is not to beautify reality. The purpose is to speak truthfully, in keeping with my responsibility to Parliament and the Greek people, to clearly set out the choices before us.
We are reaching, I hope, the end of a very difficult battle—perhaps the most difficult we’ve had in the country’s history, post-dictatorship. We negotiated arduously on behalf of Greece and also, to change Europe’s course. Today, based on the results, this might not seem possible–and we have to admit so. However, I am certain that sooner or later, these seeds of democracy and dignity that we sowed will bear fruit for other peoples in Europe.
We shifted the demand for an immediate end to austerity to the center of public discourse across Europe, and around the world. We negotiated so that “mutual respect” be a guiding principle, i.e. respect for the rules governing the European Union, as well as the respect for popular sovereignty and democracy.
We triggered a pan-European solidarity movement in support of the Greek people who are suffering—which we haven’t seen the likes of since the fall of the dictatorship: The last time there were solidarity demonstrations where the squares of European cities were filled with Greek flags, was during the seven-year dictatorship.
We fought for those who receive low wages and meager pensions, we fought for labor rights, to avoid collective redundancies. We fought for what we perceived to be the just demands of the Greek people. I am certain that this fight will not be all for naught.
Ladies and Gentlemen Members of Parliament,
Authorizing the Minister of Finance at such a critical moment is not simply an ordinary matter requiring a vote. It is a vote of conscience of high political importance, because it concerns our future. And obviously it is a choice of conscience, but also of high national responsibility.
Now, our national duty is to support our people to be able to continue fighting with pride for justice, and to continue fighting with perseverance for progress and prosperity. Our national duty calls for making difficult decisions. I am sure that we will live up to this responsibility and we will succeed. I am confident that our people’s perseverance, passion for life, for dignity, will be our guide in the following days, in the coming years.
We will succeed! We will not only manage to stay in Europe, but to live as an equal partner with dignity and pride, seeking justice in Europe, paving the way for the other peoples of Europe, as well.