Former Greek PM George Papandreou will appear on Fareed Zakaria’s famous GPS show on CNN this Sunday. The interview is focusing on Europe’s worst crisis yet. Zakaria asks Papandreou some very interesting questions related to Greece’s future in the euro zone such as: Should Greece drop the euro? Can Germany do more? What happens next? Are the austerity measures effective and will the worst crisis of the capitalistic system be solved if 3 million Greeks retire 6 years later than they previously did? Zakaria is famous for his excellent interviews on GPS and for truly understanding other cultures and their beliefs so be sure to tune in Sunday at 10a.m. and 1p.m. ET.
Below you can read the full interview transcript as it was provided to Greek Reporter by CNN’s FAREED ZAKARIA GPS
FULL INTERVIEW TRANSCRIPT
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.FAREED ZAKARIA, CNN HOST, FAREED ZAKARIA GPS: Mr. Papandreou, thank you for joining me.
GEORGE PAPANDREOU, FORMER GREEK PRIME MINISTER: Thank you very much, Fareed.
ZAKARIA: Let me ask you right at the outset, how do you think things are going to resolve themselves in Europe? There is — there are really two views. One is that at the end of the day, the Europeans will do whatever it takes, and that means using whatever mechanisms are necessary, the Stability Fund, the European Central Bank, Eurobonds, to calm the markets and to allow this process to move forward.
And the other is that you will need some kind of deep, sharp crisis, that you will need something more dramatic that is going to happen. How do you — where do you think things are going to go?
PAPANDREOU: Well, I think we’re at a crossroads, Fareed. And it is really the decision, the political will that is necessary to decide on whether we will move forward to a deeper union, and, therefore, not only protect the Euro Zone, but protect, I would say, everything we have accomplished in Europe, which is peace and greater prosperity,
Very different cultures and languages and peoples living together in cooperation. We are a model of a global society which is based on a democracy, human rights. And these are huge accomplishments and very important, I think, now, with what’s going on around in our neighborhood, with the Arab spring, with our neighbors to the east, also, we are a model. We will lose this if we don’t move into a deeper union. And the crossroads is that if we don’t have that political will, then I think we will be seeing the maybe slow, maybe quick, breakup of the Euro Zone.
ZAKARIA: But it seems to me there are two tracks here. One is what you’re describing, a tight — tighter fiscal union, a closer, deeper Europe. And that may well happen, but it will take, frankly, years to figure out whether that is working well.
The markets want a resolution to the crisis. And the resolution to the crisis is separate and will have to involve probably the European Central Bank. And it will have to involve some kind of, perhaps, Eurobonds. That’s the part which the Europeans seem to be balking at. The Germans say we want a tighter union, we want and we’re willing to pay those prices, but are they willing to take the short-term measures to get this crisis resolved?
PAPANDREOU: Well, we have been taking piecemeal measures over the past two years with, beginning with the Greek crisis, which ended up in, as I had said, from the very beginning, this is not simply a Greek crisis. We have our responsibility and we are making the major changes in Greece. But this is a systemic crisis for the Euro Zone. We’ve been taking some small, sometimes even big steps for European standards. But it’s been too little too late.
I know what I would like to see and I think which will calm the markets. I don’t know if we will be making these decisions. But now, I think the markets need — they want to see a strong will and trust the European Union and the euro. And I think this is what we have lost over the past two years, is that sense of trust that we do — we will take the necessary measures.
ZAKARIA: You understand the German concern. And the German concern is that if they write the check, they lose all their leverage over you and over the Italian government and that when there have been moments where it seemed as though the debt of Europe was centralized, in effect, that they were writing the checks, governments have seemed to relax on their reform measures, not so much you, but in the Italian case. Do you think there is some way to persuade the German government that the pressure for reform stays even if they solve the short-term problem of the crisis?
PAPANDREOU: Yes, I think there is. I think this is a legitimate concern. And let me put it this way. Had there been a stronger monitoring of the European Union from the European Union and even from the ratings agencies — on the member states, I would not have, as a prime minister, inherited a situation where the deficit was close to 16 percent and the debt almost doubled in the previous government and nobody really made much fuss about this. They didn’t really see it coming.
That’s why I think monitoring is important. We’re paying for this right now. And many of the Greeks are unjustly paying for this because they’re paying for — for — for things that they didn’t — weren’t — weren’t responsible for.
So I think that we all want to see this monitoring strengthened. At the same time, if we do collectivize our debt management and also the whole process of investment and using the Eurobonds, this will give leverage to more monitoring. The program we’re under now is under very strict monitoring and very strict conditions.
ZAKARIA: Mr. Papandreou, there are a lot of people who say that, look, Greece would be better off if it were able to default. Martin Feldstein, you know, a world famous economist, said Greece would be better off it — if it abandons the euro, devalues its currency and defaults.
There is a German think tank which put out a report that pointed out that if Greece were able to devalue its currency by 44 percent, it would then reach the same — then Greece would be about as expensive as Turkey, which is where it should be. It should not be as expensive as Germany or Holland. Doesn’t that make sense?
PAPANDREOU: Well, there are many other, if you like, there would be a lot more collateral damage, which would be almost, could be devastating, not only for Greece, but also for Europe itself.
First of all, don’t forget that we’re tightly knit. This is not something which is — we’re not — as if we’re pegged to a currency. We are a tightly knit common currency. So that’s very different than, let’s say, Argentina having pegged its money to the dollar, which they can sort of changed in one day.
We have — everybody in Greece use euros. The banks use euros. You can imagine what we’ll have. First of all, we’ll have a run on the banks. The banks will collapse. The debt will have to be paid back in euros and not in drachmas or whatever currency we go to. Thirdly, we will have more contagion, I believe, in the European – in the Euro Zone. When you have one country leaving, why not have another or a third or a fourth leaving, where markets will say, well, of course, others have high debts, too.
ZAKARIA: Let me ask you one final quick question. The leader of the opposition, whom you have dealt with and then had to cede power to was your former college roommate at Amherst. What was it like to have a political rivalry that seemed very vicious at times with a guy who you once shared a bathroom with?
PAPANDREOU: Well, I’ve always hoped that that personal relationship would help in finding wider consensus, because the magnitude of changes we are making in this country we have never done over the past 30, 40 years. And that’s why I actually proposed a referendum to bring the responsibility to the people and create a sense of ownership for this program.
We now have this national consensus on this basis, to take both tough measures, but also change Greece, make it a dynamic country, a dynamic economy, make sure we stay in the euro and the Euro Zone. And I believe now, we have a good prospect and a more sure prospect for the Greek people and Greek society, too.
ZAKARIA: Mr. Papandreou, a pleasure to have you on. Thank you so much.
PAPANDREOU: Nice talking to you, Fareed. Thank you very much.
ZAKARIA: And we will be back.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
