In an interview with John Papageorgiou, Kostis Hatzidakis, Greece’s Deputy Prime Minister and EPP’s Vice President, emphases the importance of ensuring the European Union is financially equipped to address modern challenges. As he stresses, Greece strongly supports funding for the Cohesion Policy and Common Agricultural Policy, advocating for more ambitious proposals during MFF negotiations. Athens also welcomes increased investment in migration management, defence, and the climate crisis, alongside greater emphasis on infrastructure under the Connecting Europe Facility. The government fully supports the emphasis on competitiveness as a strategic priority but raises warning against a disproportionate allocation of Competitiveness Fund resources that could widen regional inequalities. Moreover, Hatzidakis stresses that Greece has experienced a strong economic turnaround, marked by record exports, rising investment, declining unemployment, and a return to budget surpluses. He outlined the next phase of the government’s economic strategy, focusing on further microeconomic reforms.

How do you assess the European Commission’s proposal for the next Multiannual Financial Framework? In which areas does Greece express agreement, and in which domains will it seek to advocate for changes, in light of discussions expected to conclude during the Greek Presidency in 2027?

The start of negotiations on the new MFF comes at a pivotal moment, as the EU confronts a range of complex and interrelated challenges. It is therefore imperative that we equip the Union with the financial instruments it needs to respond effectively.
From Greece’s perspective, I would first like to underline the importance we place on the Cohesion Policy and the Common Agricultural Policy. In this regard, we expect to see increased funding and more ambitious proposals put forward in the course of negotiations.
Second, we view the strengthening of EU programs in areas of Greek interest — including migration, defense, and the climate crisis — as a positive development. We also welcome the increased resources directed to the Connecting Europe Facility, including the emphasis on transport networks and energy interconnections.
Third, while we fully support the emphasis on competitiveness as a strategic priority, we must ensure that the operation of the Competitiveness Fund does not unintentionally exacerbate regional disparities. Adequate safeguards are necessary to avoid the concentration of resources among only a few major players and to guarantee a truly level playing field for all member states.
More broadly, I believe we should avoid framing the MFF debate exclusively in terms of net contributors versus net recipients. First, because a significant portion of EU funding ultimately flows back into the economies of the largest contributors — through contracts, supply chains, and investments. And second, because the strategic value of EU policies — in strengthening Europe’s competitiveness, resilience, and strategic autonomy — far exceeds what can be captured by a narrow accounting of budgetary balances. These are shared European objectives that serve the long-term interests of all member states.
Greece will engage actively and constructively in the negotiations. As a government, we have consistently demonstrated our ability to achieve strong outcomes in such negotiations. I remind you of the Recovery and Resilience Facility (RRF), through which Greece secured the highest level of funding relative to GDP among all member states.
Above all, our goal is to contribute to a forward-looking, balanced agreement that not only reflects national priorities, but also advances the Union’s shared ambitions — for a stronger, fairer, and more competitive Europe.

In view of the significant geopolitical challenges of our time and the European Union’s goal to invest in sectors such as defense and security, do you consider the full implementation of the new fiscal rules fully feasible — including the application of the national escape clause for defense expenditures?

First of all, it is important to clarify that fiscal prudence is not a matter of ideology; it is a necessity. We learned this the hard way during the crisis in Greece. That is why I have repeatedly stated that, regardless of the EU’s fiscal rules, we are committed to staying on this responsible path.
At the same time, when our security and freedom are at stake, otherwise legitimate and reasonable ‘debt-is-debt’ arguments cannot be viewed in the same light. This does not mean eliminating checks on national spending. But it does mean allowing for greater flexibility from European institutions regarding defence expenditures—particularly for those countries that wish to invest more heavily in their defence.
In this context, we welcomed the Commission’s proposal to activate the national escape clauses from 2025 to 2028. We were among the first to submit a formal request, which was ultimately approved just a few weeks ago.
As a result, our country — like other European nations that made use of this possibility —will now be able to exclude upcoming increases in defence investments from deficit calculation rules. This represents a significant achievement for Greece, which has long argued that defence spending should have a special treatment within the EU fiscal framework.
Equally important is the fact that we succeeded in shifting the reference base year for our country from 2021 to 2024. Had 2021 remained the base year—when Greek defence spending exceeded 3% of GDP—there would have been no room for flexibility. With the new base year in place, we will have an additional €500 million in fiscal space for 2026 and beyond. This increase is well within the capacity of the Greek economy and will not pose a risk to fiscal sustainability over the medium term.
At the same time, the escape clause rule is not the only tool available under the ReArm Europe Plan. We also have a new financing instrument, SAFE, to support joint procurement of defence equipment through common borrowing – also a long-standing Greek demand.
This does not mean that we will immediately bridge the gap created by years of underinvestment in defence. Reversing such a long-standing shortfall will take time, sustained efforts, and coordinated action. However, what matters is that the EU is finally moving in the right direction—acknowledging the need for stronger collective security and taking concrete steps to support increased defence capabilities across member states, all while upholding its commitment to sound public finances.

Following the economic hardships of the previous decade, Greece now demonstrates improved macroeconomic and fiscal indicators. What are your immediate priorities to sustain the current pace of economic growth, and what reforms should we anticipate in the near term to support this objective?

In recent years Greece has undergone a remarkable economic recovery, underpinned by strong growth rates, historically high exports, a rebound in investments and a significant decline in unemployment. On the fiscal front, following the pandemic we have consistently achieved increasing primary surpluses, leading to an overall budget surplus of 1.3% in 2024. Public debt has been reduced by 55 percentage points of GDP – one of the steepest declines Europe has ever seen.
This macro progress is enhanced by positive micro and institutional improvements. Greece is today a more attractive place to do business, thanks to lower taxes, simpler regulations, and better digital public services. The banking sector has undergone a robust recovery, clearing-up non-performing loans and restoring its ability to finance the real economy. The upgrade of Greece’s credit rating to investment grade signals a new chapter of economic stability and growth.
Maintaining sound public finances will remain a top priority in the coming years—with primary budget surpluses projected to stay close to 2.5% of GDP and public debt expected to decline further by 20 percentage points by 2028.
At the same time, our strategic focus is now shifting from macroeconomic stabilisation toward enhancing the micro-foundations of our economy. In particular the priorities of our economic policy are as follows:

  • Continue reducing the tax burden for businesses and employees, while combating tax evasion.
  • Further improve the business environment by, inter alia, reducing the regulatory burden for businesses by at least 25%, continue improving the state’s administrative capacity, speeding up the delivery of justice and fostering competition, especially in the services sector.
  • Further improve financing conditions, by promoting competition in the banking sector and expanding the Greek capital markets – a crucial component particularly for small and innovative SMEs.
  • Upgrade our physical infrastructure and connectivity—from roads and railways to renewable energy networks, electricity grids, and high-speed internet
  • Continue investing in upskilling and reskilling initiatives, to ensure our workforce is prepared for the demands of a rapidly evolving economy.
  • Boost extroversion, by advancing economic diplomacy and enhancing our key support institutions—Enterprise Greece and Export Credit Greece.

What is your outlook regarding the completion of Greece’s Recovery and Resilience Plan (RRP)? Are you concerned by the expiration of the Recovery and Resilience Facility (RRF) at the end of 2026? To what extent could this impact the country’s growth trajectory and economic productivity?

As I mentioned before, Greece has secured in 2021 the largest resources from the Recovery and Resilience Facility, as a percentage of GDP. Absorbing such a large amount in such a short period is a challenge for every EU country, yet we have performed remarkably well.
Greece ranks among the top six Member States for RRF disbursements. To date we have received €21.3 billion, covering more than 59 % of our total envelope—ten percentage points above the EU average (49 %). Once the sixth payment request (submitted on 18 July) is approved, cumulative disbursements will rise to €23.4 billion (65 %). In November we will submit a further payment request, which will bring us to 80%. So, there will be a further 20% remaining for 2026.
It is also important that 70% of reforms included in the plan has already been completed – a significant achievement for a country which had a reputation of being slow on this domain.
Of course, there is no place for complacency. The EU’s August and December 2026 deadlines are strict. That is why we are stepping-up our efforts, following the Commission’s recommendations: by scaling-up fast-moving, high-demand measures; swapping any slow projects; and bridging finance, with national and other EU funds, where works extend beyond the RRF window.
Looking beyond the core RRF window, there are several reasons for being optimistic that investment will remain elevated through the end of the decade.
First of all, projects supported by RRF loans signed up to 2026 will continue to disburse well into 2027 and beyond.
In addition, as tenders are awarded and projects reach maturity, spending under the €26 billion ESPA cohesion-policy programmes is expected to accelerate sharply over the next few years.
Moreover, three new instruments will come on stream in January 2026—the Social Climate Fund, the Modernisation Fund and the Island Decarbonisation Fund—bringing a combined envelope of about €8 billion for Greece through 2032.
Last but not least, a robust pipeline of PPPs for infrastructure projects is under way. At the same time, the privatisation and concession programme, which has already reached record levels, will continue to unlock capital, know-how and long-term investment streams, particularly in ports, airports and real-estate assets.

To what degree does the recent investigation by the European Public Prosecutor’s Office into the use of Common Agricultural Policy (CAP) funds affect your work and Greece’s broader efforts to bridge the investment gap? Do you foresee any potential political ramifications arising from this matter?

We are committed to speaking honestly about both our shortcomings and our accomplishments. While it’s true that similar challenges have arisen in other European countries and under previous administrations, we do not seek to offsetting blame.
What concerns citizens most at this moment is twofold: ensuring that funds wrongly obtained by certain individuals through agricultural subsidies are recovered, and bringing an end to the ongoing problems surrounding OPEKEPE.
Legal proceedings are already underway at the national level—independently of the European Public Prosecutor’s investigation—and we are prepared to strengthen the legislative framework wherever necessary. In this context a special audit task force will be formed, with staff from the Financial Police and the Independent Authority for Public Revenue (IAPR), with the mission to investigate the unjustified agricultural subsidies.
We have also proposed to set up a Parliamentary Inquiry Committee to scrutinize the actions of OPEKEPE’s leadership from 1998 to the present, explore underlying problems, and close the gaps that lead to substantial economic penalties from the European Union.
At the same time, we have decided to bring OPEKEPE under the Independent Authority for Public Revenue (IAPR) an organization which is internationally recognized for transparency and integrity in its operation, and with a strong and proven backbone of digital infrastructure and information systems. The Greek government is determined to move forward promptly with the adoption of the necessary legislative measures in Parliament. The transition will be carried out efficiently and reliably and in close collaboration with the European Commission.
New Democracy has nothing to hide. We steer clear of both witch hunts on one hand and cover-ups on the other. This government has delivered important achievements in fighting bureaucracy and red tape – from the digitalization of the public sector and the awarding of pending pensions to the completion of the Cadaster and the expansion of digital services in the health sector. In a few cases, such as OPEKEPE and the Greek Railways, we haven’t been successful. However, this government has a clear mandate for a full four-year term, and it should be judged based on its overall performance throughout that period.

In addition to serving as Deputy Prime Minister, you also hold the position of Vice President of the European People’s Party (EPP). Are there areas in which these two roles function in a complementary manner? Furthermore, are there specific priorities associated with your position within the EPP that you would highlight?

Being elected Vice-President of the European People’s Party (EPP) is a true honour. I am deeply grateful to our Prime Minister, Kyriakos Mitsotakis, for nominating me, and to the many EPP delegates who, through their vote, honoured both New Democracy and Greece. This role is not only a recognition of our country’s remarkable progress over the past six years, but also a responsibility I take very seriously.
In fact, there is a strong complementarity between my role as Deputy Prime Minister of Greece and that of Vice President of the EPP. In both capacities, my focus is on confronting structural challenges and delivering tangible solutions—not just promoting popular policies, but implementing necessary reforms that make a real difference in people’s lives. As I have done in the past—whether in resolving issues with Olympic Airways, addressing problems within our national electricity company, or tackling tax evasion and pension backlogs—my goal is to be useful, not performative.
Within the EPP, my portfolio includes oversight of fiscal policy and the European budget. This is especially significant, as it reflects the trust placed in Greece’s transformation into a credible and constructive player within the EU. Our government doesn’t just participate in Europe to demand—it also brings forward ideas and solutions.
We don’t need more or less Europe—we need a more effective Europe. One that delivers for citizens in areas like the economy, social cohesion, energy, and defence. That’s why I have consistently advocated for the implementation of the Letta and Draghi reports, which address the future of the Single Market and Europe’s competitiveness. I have spoken clearly about the need for a genuine common energy policy to reduce prices and ensure stability, and for a meaningful common defence policy that reflects today’s geopolitical realities.
Ultimately, I believe politics is about delivering measurable results. Leaders should neither ignore public sentiment nor shy away from necessary decisions. They must have the courage to explain, to lead, and to inspire. This is the spirit in which I serve—both in the Greek Government and in the European People’s Party.