The message that energy prices will continue to decline, and that the government is ready to take additional support measures if necessary, was conveyed by Prime Minister Kyriakos Mitsotakis in his discussion with Ben Hall of the Financial Times. At the same time, the Prime Minister estimated that for the first time, possibly within the year, Greece will no longer be the most heavily indebted country in Europe.

Kyriakos Mitsotakis underlined that Greece has already achieved significant progress in the energy sector, noting that from being the country with the highest wholesale electricity prices in 2019, it is now below the European Union average.

“Back in 2019, Greece had by far the highest wholesale electricity price. Now we are below the EU average and we are major electricity exporters,” he said.

The Prime Minister attributed this improvement to the strategy of strengthening renewable energy sources, noting that more than 50% of the country’s electricity production now comes from renewables.

He also predicted further declines in energy prices in the coming period. “Prices will continue to fall as we add more renewables to the energy mix and as, I hope, natural gas becomes cheaper,” he said.

Regarding his estimate that, for the first time, Greece will not be the most heavily indebted country in Europe, he stated: “This is a political legacy for me and an obligation to future generations. We will not risk it. Everything we do must operate within European rules. If we are talking about national borrowing, that is a completely different matter. If we are talking about European borrowing, then it must be directed toward very specific European priorities.”

Open possibility of new measures

He also placed special emphasis on the pressure that the high cost of living places on European households, describing it as the biggest problem governments in Europe face today.

“The main problem facing our governments in Europe today is the affordability of the cost of living,” he said, stressing the need for higher wages, greater productivity, and more fiscal space to effectively address inflation.

Mitsotakis also left open the possibility of further intervention measures against inflation if necessary.

“There may be additional measures to follow. I hope we will not need to implement them,” he said, noting that the government aims for targeted and temporary measures so as not to further fuel inflation.

Energy strategy and renewables

Referring to Greece’s overall energy strategy, the Prime Minister said the country is now among Europe’s leading nations in solar and wind energy development, while it has reduced carbon dioxide emissions by almost 50% compared to 2005.

He also argued that the EU budget does not currently match Europe’s ambitions and that private capital must also be mobilised.

“If, for example, we want to be much more ambitious in defence—and for me defence is the quintessential European public good—then we should consider European borrowing for specific priority areas,” he said, adding: “I would not support generalized European borrowing to deal with an economic crisis, but targeted European borrowing could be on the table.”

He also noted that Greece and Italy have deployed ships to protect freedom of navigation in the Red Sea.

“Greece could reach 80% renewables”

The Prime Minister also referred to planned offshore exploration in Greek waters for potential deposits, saying this would benefit both Greece and Europe.

“Greece could have 80% renewable energy, but the remaining 20% must come from something else. We are not abandoning the green transition strategy. We are rapidly expanding energy storage capabilities. Storage is critical for Greece. Natural gas will remain with us in the foreseeable future. And we are not abandoning renewables. But if I can find it, I prefer to produce our own natural gas rather than pay for imports. That would make a huge difference to our public finances and an even bigger difference to our energy security,” he stressed.

He also said that Europe does not yet have a true energy market, but rather a fragmented one, and that there are insufficient interconnections. He emphasized the need to treat electricity as a European resource and supported investment in grids and interconnection infrastructure.

Referring to the Draghi report, he said energy costs are a top priority. He also noted that electrification will increase electricity demand, making electricity prices a critical factor in overall costs.

On nuclear energy, he said it is the only long-term alternative to natural gas for base-load electricity generation. A working group has been set up to examine the future of nuclear policy in Greece, but no decisions have yet been made.