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Chief Bailout Negotiator: Greece Needs An 'Economically Sustainable' Deal


We are joined now by Euclid Tsakalotos. He is deputy foreign minister for Greece and the head of Greece's negotiating team.

Thank you so much for taking the time to be with us.

EUCLID TSAKALOTOS: You're more than welcome.

MARTIN: Greeks are clearly confused about what Sunday's referendum is about. Can you clarify? What are they voting on?

TSAKALOTOS: Well, the institutions - that's the IMF, the European Commission and the ECB - made a proposal for an agreement. And that agreement, we felt - the Greek government - was not sustainably economically or socially just. And it's that proposal that is being put to the Greek people to either accept or to reject.

MARTIN: But as I understand it, that particular proposal isn't even on the table anymore.

TSAKALOTOS: Yes, that is technically true, but there is going to be a new agreement, and that agreement is going to be of a certain character. So we know what the institutions were proposing. I think most people understand the really underlying issues.

MARTIN: Is this a negotiating tactic, to call this referendum? Since it doesn't explicitly validate or discredit a particular proposal, it's mostly symbolic in nature.

TSAKALOTOS: In one sense you're right, and in one sense you're wrong. In one sense you are right, in the sense that we always said that this referendum was part of the negotiation process and not in lieu of the process. And it's part of the negotiation process when we feel that we really did try our very best to reach an honorable compromise, whereas the IMF, the Commission and the ECB proposal was much more close to their opening bid three months ago, rather than trying to find the common ground. And that's where you're wrong. It's more than a symbolic gesture. It's a democratic gesture. And what we're asking is that European people must respect the democratic decision because if they do not, people will draw the terrible conclusion that in Europe you can vote, but it doesn't matter who you vote for, what electoral platform you vote for, what manifesto you vote for - you always get the same policies. And that means that people will be disgruntled with the democratic process, alienated from the democratic process, and that could lead to some very nasty, nationalistic, right-wing politics.

MARTIN: If the vote does not go the way you would like it to, if Greeks vote yes, does that mean your government folds?

TSAKALOTOS: Well, I can't tell you the mechanics - the political mechanics. But, obviously, it's like a vote of no-confidence for opposition for the Greek people, and that is a very serious matter. We would have to respect the decision of the Greek people, and the deal would have to be signed on the lines suggested by the institutions.

So the political mechanics are less important than the substance. And the substance is that we would need a government who believe in the institution's proposals, think that they can work. Presumably, a lot of people who are voting yes and the politicians recommending yes - who are the same politicians, I would add, who ran Greece over the last five years with disastrous consequences for people's income - they would have to have a greater say in a government. But exactly how that would be carried out, it's too early to say.

MARTIN: If the vote is no then what does that mean - talks continue?

TSAKALOTOS: We will be there on Monday morning, if there is a no vote, negating on one and only one criterion. What we need is a deal that is economically sustainable, and that's why it must have something on the debt because what we have in Greece is a lot of pent-up demand. We have people that have some money who are not spending it now. Not because they don't have it, but because they fear the future. We have savers who are not willing to put their money in banks because they fear for the future. And we have investors not investing because they fear for the future. And unless the decision on debt it taken now and not pushed back to December or Easter or next summer, that pent-up demand won't be released, and then we won't even be able to keep our promises.

MARTIN: But what do you say to smaller European countries, like Ireland, who never got their own debt restructured, and they say, you know, Greece got themselves into this bind and they need to suffer the consequences?

TSAKALOTOS: Well, I think a lot of the smaller countries are saying that not because they're annoyed at the Greeks, but they don't want their own people to have a new deal. So I think that's a slightly different matter. I think, as you know, Europe is the sick man of the world economy. Just to keep doing the same thing, time and time again, doesn't seem to me, as an economist as much as a politician, to be wise.

MARTIN: Euclid Tsakalotos is the deputy foreign minister of Greece.

Thank you so much for talking with us, sir.

TSAKALOTOS: You're more than welcome, once more. Transcript provided by NPR, Copyright NPR.