Ambassador Pyatt in Conversation with ERT, Fanis Papathanasiou for AmCham 9thAnnual New York Greek Investment Forum
June 15, 2020
Fanis Papathanasiou: Mr. Ambassador, thank you for this opportunity for this chat for the 9th Investment Forum.
Ambassador Pyatt: Thank you.
Fanis Papathanasiou: Let’s start with — we have almost one-year anniversary since the last year’s election. Of course in a different international, domestic, and social environment with a lot of volatility, a lot of uncertainties. How do you judge your cooperation with the Greek government, Prime Minister Mitsotakis? And also, how do you judge cooperation in the stance of the opposition leader, Mr. Tsipras?
Ambassador Pyatt: It’s a good question. I remember a year ago during the last ATHEX-AmCham Roadshow, I did an interview like this in New York City. At that point, I was very bullish about U.S.-Greece relations, but I think I was not sufficiently ambitious in terms of the vision that I set out.
I’m very proud of all that we’ve accomplished in the past 12 months since the election of the new government. You can see how quickly the Trump administration responded to the Prime Minister’s election. We had Secretary of Commerce Wilbur Ross here just a few weeks after the election. We had Frank Fannon, our Assistant Secretary for Energy here. Phil Reeker, our Assistant Secretary for Europe…
Fanis Papathanasiou: Secretary Pompeo?
Ambassador Pyatt: Exactly. We tried to set a very ambitious agenda for our engagement in both directions. It was terrific that we had Foreign Minister Dendias in Washington, DC, on his first international trip. I think it was about nine days after he was sworn in. We were able to get Secretary Pompeo here for the Strategic Dialogue in October. We had the Prime Minister in Washington for a fantastically successful visit in January, along with a lot of the key ministers including Minister Georgiadis, Minister Kerameus on Education — where we’ve accomplished a great deal together.
I think we’ve benefitted from the fact that Greece was able to move very quickly and the government was able to move very quickly in terms of building an even stronger reform agenda — taking a relationship that was already good and raising it up to the next level. We’re very excited about everything that we’ve gotten done on the high technology front with Minister Pierrakakis. The fact that this government accomplished in 12 months what we had not accomplished in 12 years in terms of getting Greece off of the USTR 301 list, in terms of moving ahead with big new investments from major American technology companies like Microsoft, like Applied Materials from Silicon Valley. Clearly the digital transformation of Greece has begun, and American companies have played a critical role in that.
We have the defense and security relationship which was already very strong and has moved ahead with the expansion of our Defense Cooperation Agreement. You saw I was in Souda Bay just on Friday with Minister Panagiotopoulos and the Chief of Defence.
So I’m very proud of what we’ve accomplished. I think it’s helped by the fact that in both countries there’s strong agreement on the importance of this relationship. As I said, what we’ve accomplished with this government is built on a foundation that was laid by SYRIZA and likewise in the United States. Both the support from the administration, from the White House, from Secretary Pompeo, but also very strong support from the Democrats, especially Senator Menendez, who led the charge for the East Med Act, which I think will be remembered over the long term as a really significant symbol of how our relationship is maturing.
Fanis Papathanasiou: We are in a different environment right now. A lot of volatility. Actually this week a crash test for Greece is opening to tourism — Mitsotakis yesterday from Santorini said Greece is a safe destination. Greece opens to mass tourism. Of course I have a lot of friends in the United States. It won’t be easy this year. What the American government could do to help Greek tourism?
Ambassador Pyatt: The first thing I will emphasize is how impressive it has been to see the way in which this government managed the global pandemic. The COVID crisis is one which nobody predicted, and the fact that Greece was able to position itself so effectively by listening to the scientists, by moving early to a regime of social distancing, and by relying on the discipline of the Greek population, and I think Greek citizens have a lot to be proud about as well. There are reputational gains which Greece has enjoyed because of that.
I’m also very proud of the role that American technology and American science is playing in helping to shape the Greek response, the sort of technology dashboards that the Prime Minister has used. The Prime Minister’s been clear that Greece’s approach to reopening is going to be data driven and that’s the right way to approach it.
Everything about this pandemic has forced us to rethink how we approach this. First of all, the relationship with China, which we can talk about later, but it’s going to be much more complicated because of the way in which the Chinese state managed and mismanaged the pandemic. But also as we’ve learned new things about how the disease spreads.
So we the United States government are going to be very supportive of the measures that Greece has taken. Also this effort to reopen. I know a lot of Greek-Americans are very eager to see how they will be able to come back to Greece this summer. And I think Greece, as the Prime Minister said, is well positioned to take a larger share of a smaller pie, but to do so in a way that looks after both the safety of visitors but also the safety of Greeks.
Fanis Papathanasiou: Where do you want to go this year?
Ambassador Pyatt: Oh, I’ve got a long list. I’m starting with Mani in the next couple of days. We’re going to go back to Sifnos, which is a wonderful island. I really appreciated the advertising campaign about how Greek summer is a state of mind. I always say, I don’t think Greeks understand how special their summer is. So we’re very much looking forward to enjoying a Greek summer here, and I hope a lot of American citizens will be able to do the same. But we all have to be disciplined. We continue to respect social distancing. Wear masks when you’re in confined locations. Be smart, which is what Greece has done so far.
Fanis Papathanasiou: At the same time, overall about the investment environment. Greece is facing some issues now. We have the possibility of a lockdown any time. The economy is facing some problems because of post-COVID era. How do you evaluate Greece’s efforts and the government’s efforts to evaluate the business momentum, for making business and for U.S. investments?
Ambassador Pyatt: Obviously the Coronavirus has created a global shock. It was a setback to the U.S. economy, a setback to the Greek economy, but to everybody else as well.
The good news now is that we’ve all begun the process of reopening. I think all of the things that made Greece a compelling investment target before COVID are still the case today. Greece, like everybody else, is going to have to work a little bit harder, I think, to make the case, but this government has demonstrated commitment to an agenda of reform. I talked earlier about how impressively the government moved out, and I think if you look at Prime Minister Mitsotakis’ first 100 days and the record of legislative implementation there in terms of tax reform, in terms of streamlining investment — we’ve worked very closely with Minister Georgiadis. I very much share his hope that we’ll all be down at Hellenikon with bulldozers sometime this summer. I’ve been talking about the Hellenikon Project for four years now, since my arrival in Greece.
Fanis Papathanasiou: About this, what signal Hellenikon will send to the markets?
Ambassador Pyatt: I think it sends two signals. One, it’s an enormous investment project in a critically important tourism sector, a billion dollars more or less just for the integrated resort complex. And then it also demonstrates that this government can cut through the Gordian knot of bureaucracy that has been the biggest impediment to investment in Greece.
It’s similar to the success that we marked in December with the relaunch of the Syros Shipyards. Again, a project with American investment in a sector that was traditionally one of Greece’s strengths, and an enterprise that had been strangled by Greek bureaucracy. Now Syros is back in business. I saw a photograph from somebody who was in Syros a week ago. There were five ships. All the drydocks were full, the piers were filled up. The Syros shipyard is over-subscribed. We’re working on the project now around Elefsina.
So I think the areas in which Greece will excel are going to be the areas where Greece has traditionally been strong: tourism, logistics, maritime. There are a couple of pillars that we’ve added to the equation over the last few years. Energy is one, and we can talk about that later. And that’s going to continue to grow, helped by the Prime Minister’s ambitious goal of eliminating lignite power by 2028. And then the new area, as I mentioned earlier, is technology.
Fanis Papathanasiou: On this, what’s the prospect, we have a new project with excellence centers in Thessaloniki. What’s the prospect for the high tech, taking advantage of the Greek talents?
Ambassador Pyatt: Greece has fantastic human capital. It has a very strong educational tradition. The startup sector has traditionally been impeded by the government, and I remember four years ago, one of my first meetings that I did in Greece. I came to this job as a Californian, somebody familiar with Silicon Valley, excited about this technology stuff. And I met here at the residence with a group of young technology entrepreneurs, and I asked them a question, what do you need from the government? And they answered instantly, they all said just stay out of our way.
Now you have a government which is favorable to technology. The Prime Minister has talked about using the Eurozone Recovery Funds to accelerate the digital transformation of the Greek economy. Investments like the Applied Materials investment in Think Silicon in Patras, or Microsoft’s investments here in artificial intelligence, or what Pfizer is doing with an artificial intelligence center in Thessaloniki.
Fanis Papathanasiou: Cisco, Tesla…
Ambassador Pyatt: They all demonstrate that there’s a value proposition that Greece provides. You just have to create the enabling environment.
What’s interesting to me is — and you mentioned the Tesla example, which is a really compelling one. It’s a small operation, but their talent base is composed of Greeks, Greek engineers who are working outside in the United States, in Sweden, in Australia, and they’ve come back because they want to work for Tesla. But they’re very happy to be in Greece because we’re in Athens. It’s 330 days of sunshine. A wonderful culture. Wonderful environment. The impediment in the past was government, and that’s starting to change.
Fanis Papathanasiou: And the globalization helps this. In terms of the reforms, is it something that you want to see more working in order for Greece to create a more business-friendly environment for U.S. investments?
Ambassador Pyatt: I think that’s more a question for Greeks and for the Greek government. We have seen significant progress. I mentioned tax reform earlier. I mentioned administrative reforms. The improvement in terms of intellectual property rights is very important to technology investment. I can promise you the reason that Microsoft has been willing to come back to Greece in such a big way is because of the steps that the government took towards the improvement of its intellectual property policies for software and for technology products.
So this is an area where the government itself — I think the greatest pressure is coming from inside the government. I know, talking to Minister Georgiadis, they’re not finished yet in terms of the investment climate. I know, talking to Minister Pierrakakis, he has a very ambitious agenda for continued progress on digital transformation.
I’m very excited by the fact that Minister Pierrakakis on his Advisory Council — he has former President Ilves, and there are a lot of lessons that Greece can take from the Baltic countries in terms of how to go digital in a big way. What’s been interesting about this digital shock that the government introduced around the Coronavirus lockdown is that it’s shown to people that you can take this leap in a way that not only makes government more efficient but also makes it easier for citizens. More responsive to citizens. So this is one of the silver linings of this COVID crisis has been how it has helped to accelerate this process, but we very much hope to see continued movement there.
I think the other area is in terms of regulatory approval. So all of these projects that we’re working on — whether it’s Elefsina, in the energy sector — I know talking to the Minister of Energy and his team, they’re constantly working the tensions over environmental licensing and areas like wind power and solar which will be very important to the future of the Greek economy.
It’s crazy that Germany, which does not have the weather of Athens or the weather of Greece, has a higher penetration of renewables than Greece has. And that’s because of regulatory impediments. And I think Minister Hatzidakis has made great progress there, and a lot of American companies have responded.
Fanis Papathanasiou: About the two strategic priorities as they’re defined by DFC as such, the strategic priorities of Elefsina Shipyard and Alexandroupolis. What’s the real prospects after the COVID —
Ambassador Pyatt: COVID has provided a short-term shock, but it doesn’t change the long-term strategic interest of the United States or our engagement in Greece.
We were very pleased in December that the U.S. Congress passed an amendment to the authorizing legislation for the Development Finance Corporation which empowers DFC to be engaged on projects in Greece, a high-income country, but projects with strategic import.
The two that we are focused on, as you mentioned, one is Elefsina, which is relatively easier because it takes a template we already know from the Syros shipyard and looks at how to take a much bigger complex, the Elefsina complex, and bring it back to life. So those negotiations are proceeding well. There’s the piece involving the government, the discussions between the Greek state and the current owner of the shipyard. And then there’s my piece, which is the role of the Development Finance Corporation, the role of ONEX which is the American company which is engaged, and the interest the larger U.S. government has in ensuring that a strategic asset like this shipyard does not go to one of our great power rivals.
Alexandroupolis is bigger because what you’re really looking at is a whole complex of projects. You’ve got the floating regasification unit. You have the IGB Pipeline which is moving ahead. You have the privatization of the port. You have the gas storage at Kavala. The emergence of Alexandroupolis as a major logistics hub, both for moving material and goods into the Black Sea region, but also as a gateway to the Western Balkans, helping to advance our goal of energy diversification for all of these countries from Bulgaria to the West that are largely dependent on Gazprom right now.
Both are priorities. I think Elefsina is closer to fruition, in part because I know Minister Georgiadis — he’s got his own political bulldozer, and he’s using that to move the project ahead. But the interest from the United States government has been made very clear. It’s very strong. We’ve had repeated engagements between Development Finance Corporation leadership and the Greek state, and we hope very much that in the same way that last December we celebrated the renaissance, the coming back to life of the Syros shipyard, we’ll be able to do the same in Elefsina during the weeks ahead.
Fanis Papathanasiou: So both sides as I can see try to keep up the business momentum even though there are difficulties, volatility, uncertainties.
Ambassador Pyatt: I think that’s exactly right. Capital has to go somewhere. Greece presents a lot of opportunities. The focus, our focus at the Embassy, for a couple of months, like everybody, we were completely focused on the health emergency, and I’m very proud of the partnership that we had with Minister Kikilias and everybody on the Greek side working that side of the equation. Now we’re shifting a lot of our focus to the economic recovery. And I think Greece has as good a chance as anybody of enjoying a real V-shaped recovery, in part because of the reputational gains that it will enjoy because of its sound management of the COVID crisis.
Look at Fareed Zakaria’s interview yesterday with the Prime Minister. I know sometimes people in Athens forget, but most of the world doesn’t spend its days thinking about Greece. But all of a sudden, Greece is a positive headline. It’s not —
Fanis Papathanasiou: It’s one of the first, little times I can see that Greece is the epicenter for a good news story.
Ambassador Pyatt: A good news story, not a crisis.
Fanis Papathanasiou: You’re right.
Ambassador Pyatt: And we all want to hold on to that and leverage it.
Fanis Papathanasiou: Sure. Let’s move on to Turkey because there are some uncertainties because in the Turkish provocations. Greece is trying with diplomatic means to cope with the Turkey provocations with Italy, trying now with Egypt. Do you think it’s enough what Greece is doing with international law?
Ambassador Pyatt: Let me say a couple of things. First of all, on the economic issues that we’ve been talking about, I do not see the Turkey concerns as a significant disincentive to the opportunities that Greece presents economically, and in fact, you continue to have significant Turkish investment in Greece in sectors like tourism. So that we can put off to the side.
We are, Greece and the United States, both of us, strongly interested in helping to ensure first and foremost that Turkey remains anchored in the West. It is in none of our interests to see Turkey drift away from NATO. And we want to see Turkey and Greece have an Ally-like relationship, which means respect for international law, which means resolution of issues through dialogue and not unilateral actions. We have been very supportive of the approach that the Prime Minister has taken, his effort to continue to build dialogue including on the difficult issues like energy. I think it’s very important that Minister Hatzidakis continues to send such a clear message that Greece wants an open architecture for energy issues in the Eastern Mediterranean, but an open architecture built on principles of international law.
On the immediate concerns around things like Libya, the United States has invested in Greece as a pillar of regional stability. My visit to Souda Bay on Friday was a reminder of how important Greece is as a stabilizing factor in an era in what we’re focused on is great power competition: the role of Russia in Syria; the role of Russia in Libya; the role of Russia in the Black Sea; the emergence of China as a factor in the Eastern Mediterranean — how we work together on all of these issues.
So the United States is interested, like Greece is interested, in having the Turkey issue be managed in a way that doesn’t detract from the Prime Minister’s focus, which is investment, growing the economy, driving economic growth, and leveraging the fantastic opportunities that Greece should have going forward, both as a successful member of the Eurozone, but also as Europe’s gateway to the Eastern Mediterranean and the Middle East.
I should have said earlier, and it reminds me, I want to reiterate the point. I think we talk about the Coronavirus dynamic across Europe. One of the things that’s really striking to me is how, through this crisis, Greece has basically become a normal Eurozone economy. Nobody is worrying about the stability of the banking system. Nobody is talking about Greece leaving the Eurozone. These are all the issues, when I came to Athens four years ago, these were the questions that people were asking. Nobody’s asking those questions anymore. So that’s progress.
Fanis Papathanasiou: Now on Turkey again, I wanted to tell you how Greece is counting on the U.S. support. You have the sense, you know in your conversations every day. The question is, to what extent Greece can count on the U.S. support? I know that you personally and the bureaucracy is trying hard, but the United States is facing interior problems, domestic problems and is in a pre-election campaign period. To what extent Greece can count on the United States?
Ambassador Pyatt: The United States is absolutely committed to our alliance relationship with Greece. The bilateral relationship today is stronger than it’s ever been. It’s a relationship which is supported by Republicans and Democrats. We benefit from the fact that all of these engagements that I talked about earlier — I know Secretary Pompeo, Secretary Ross, these key players in the administration all appreciate Greece, the value that the Greece relationship provides to the United States, but the complicated environment that Greece lives in. There’s an open channel of communication whenever it’s needed.
I think we benefit also from the fact that — as you say, as we came into an unexpectedly complicated 2020 in the United States, and you’ve got the elections complication which we knew we would confront; then the pandemic complication; and now these issues of race which are very difficult — but as I said last week when I was visiting with the President of your Parliament, the United States is a great power. We have consistently demonstrated over the years that despite whatever challenges our domestic democracy has to work through, we will continue to stand by our international obligations, and we will continue to work with our international partners to advance our shared interests.
So I think Greece can be very confident of the quality of the relationship with the United States today, and the breadth of the relationship. It’s a relationship which goes beyond politics. None of us want to get to a crisis in terms of the situation in the Eastern Mediterranean. We also need to work with our allies, and I know the Prime Minister has been very focused on working with his European allies. Greece did that very effectively during the standoff in Evros. The presence of President von der Leyen and the rest of the European leaders making clear that this migration issue is not a Greece-Turkey thing but a Europe-Turkey thing was very important. And in the same way, I know there will be an opportunity, in fact I think today as Foreign Minister Dendias goes to Paris and then Secretary Pompeo will be part of the larger —
Fanis Papathanasiou: Turkey will be one of the issues.
Ambassador Pyatt: Of course it will be. And I think the symbolism of the fact that Foreign Minister Dendias will be speaking not from his office here in Athens, but from Paris next to his French counterpart is also very important.
Fanis Papathanasiou: Mr. Ambassador, thank you very much for this chat.
Ambassador Pyatt: Thank you. It’s really good to catch up, and I’m glad we’re able to do this in the context of the ATHEX and AmCham Roadshow, which is such an important part of our effort to support Greece’s return to economic growth.
Fanis Papathanasiou: I hope you are here next year as well, and let’s do it in Santorini —
Ambassador Pyatt: Exactly. Thank you.
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