Maria Luís Albuquerque No Free Lunch For Greece

Portugal’s finance minister has sympathy for Athens, because her country was in a similar bind four years ago. But she insists Greece should buckle down and see through reforms –just like Portugal did.
Maria Luis Albuquerque, Portugal's Finance Minister.

When Maria Luís Albuquerque became Portugal’s Finance Minister in 2011, she found herself in a similar situation to her new Greek colleague, Yanis Varoufakis. She too was left with an aid program that had been signed by her predecessor. Now Portugal’s bailout has ended and the finance minister believes the suffering was worth it to get to a healthy place.

 

Handelsblatt: Ms. Albuquerque, at the start you had conditions like your Greek colleague does now. Can you understand Mr. Varoufakis?

Ms. Albuquerque: That is true. My government came into power in June 2011. At the time Portugal had to implement an aid program that the previous government had agreed to. But we then made changes, where they made sense and were reasonable. We coordinated that with our European partners and with the Troika. This path is also open to Greece. In Portugal it worked, we successfully concluded our program.

Are you prepared to make concessions to the government in Athens?

There is a framework in which we are prepared to discuss things with the Greek government. This framework is the ongoing aid program, which should be extended. We are not prepared to discuss things under other conditions. All other 18 euro zone countries are united on this issue, as well as the European Central Bank and the International Monetary Fund.

To German Finance Minister Wolfgang Schäuble, the ideas from Greece sound as if the country would prefer to have loans without conditions.

That is not possible for anyone in the world, neither for Greece, nor for Portugal, and also not for you or for me. If I ask for a loan at a bank, then I must commit myself to paying the money back. And I must provide collateral. It does not work otherwise.

Must Greece leave the euro zone if there is no agreement?

We have not discussed that in the eurogroup. Such a scenario is not on the table. Greece is a member of the common currency. And it is our wish that it remains so.

But in light of the difficult negotiations, you must prepare yourself. How much would a Grexit affect Portugal?

We are not discussing a Grexit. But with respect to Portugal, we have made major advances, and that has been recognized by the financial markets. We just issued the first 30-year bond since 2006, with great demand and low interest rates. We have full access to the market. I cannot see that the discussions about Greece have changed that.

Portugal also had reforms imposed on it by the Troika. Is there an understanding for what Greece wants?

We know from our own experience that these measures are tough. Sacrifices are required of the people. We sympathize with the Greeks who are experiencing tough times.

How would you explain to your countrymen, then, that Greece should now get new concessions?

We have a common currency with common rules. And it is in the interest of everyone that they are abided by. Otherwise a currency union cannot work. Those who keep to this framework are welcome in our club. And they will get support in difficult times. The last few years have shown that there is a willingness for solidarity, but within a framework in which Greece must also operate.

 

This interview was conducted by Mathias Brüggmann and Jan Hildebrand. To contact the authors: [email protected], hildebrand.com.