Athens , 11 March 2011

Journalist: The demonstrations in Libya developed into a civil war. What is Europe’s reply to what is happening on the other side of the Mediterranean?

Mr. Droutsas: The first clear message needs to be a call for all sides to end the violence. The second is for the will of the Libyan people – their desire for Democracy, freedom, better living conditions and more justice – to be respected. These reforms have to be implemented, and without violence.

Journalist: How can you convince Qaddafi to do this?

Mr. Droutsas: There is the pressure from the Libyan people. That is what is most important. An irreversible process is under way in Libya right now – just as in Tunisia and Egypt, with the difference that the situation in Libya devolved from demonstrations into civil war. The international community and the EU need to send a message to the Libyan leadership that they have to respect this process.

Journalist: Might the declaration of a no-fly zone over Libya constitute such a message?

Mr. Droutsas: This is being discussed, but it isn’t easy to put into effect. It is clear that any and every military operation requires UN legitimization. What is of primary importance to Greece is that international law be respected. We already have a unanimous resolution from the UN Security Council for sanctions against Libya. We have to safeguard this unity of the international community.

Journalist: But this unity of the international community hasn’t done anything yet for the Libyan-on-the-street, for the victims of the armed clashes in the country …

Mr. Droutsas: That is why we now have to act fast and, if possible, together.

Journalist: Let’s go back to the first question: How should Europe reply to Qaddafi?

Mr. Droutsas: Military intervention is always the last resort. But it needs to be clear to everyone – and this is a means for exerting pressure – that, if necessary, the international community can and must use all means at its disposal.

Journalist: So, there is a real possibility of a military intervention in Libya?

Mr. Droutsas: It certainly cannot be ruled out. We cannot sit by much longer and watch the use of violence against the country’s citizens. The EU needs to send a clear message on this. That is why it is important that the EU Foreign Ministers will be meeting in Brussels, followed by the EU heads of state and government.

Journalist: Let’s go to Greece’s credit problem. What is your comment on Moody’s B1 credit rating for Greece?

Mr. Droutsas: First of all, we have to raise the question of the credibility of these international credit rating agencies. Greece has a lot of experience with such ratings, which, in part, are inexplicable and unfair, while there is also the question of the timing chosen for the announcement of these ratings. I want to say this: You see a Greek government that for the past 18 months has been trying, through a very serious program, to confront the crisis with wage and pension cuts – which were very painful for Greek citizens – and with structural reforms, including the opening of the “closed” professions and a new tax and pension system. We are already seeing the first positive results. Within a year, the deficit has been reduced by 6 points.

Journalist: But the rating agencies apparently aren’t convinced.

Mr. Droutsas: Greece is very effectively implementing everything it has agreed on with its European partners, as our partners themselves have acknowledged. But we are seeing that only the international markets are not reacting positively. Why?  It’s obvious that this is not just a Greek crisis. The EU, as well, has to send convincing messages to the markets in order to reassure them.

Journalist: More specifically?

Mr. Droutsas: The “Competitiveness Agreement” being promoted mainly by Germany is a comprehensive packet that will decide the effectiveness of the stability mechanism: adequate funding so that the markets can see that the EU is taking the need to support the euro seriously. Regarding Greece in particular, it means an extension for repayment of the €110 billion loan and terms that are the same as those in effect for Ireland. The longer the repayment plan for a loan, the more easily markets are convinced that the lending terms will be met. And it naturally means a reduction in the high interest rates we are seeing right now.