Pierrakakis to Handelsblatt: The Greek experience can inspire Germany.

Ahead of his visit to Berlin—where he is scheduled to meet today with German Chancellor Friedrich Merz and Vice-Chancellor and Federal Finance Minister Lars Klingbeil—Mr. Pierrakakis discusses rising government bond yields, the fiscal situation in Europe, the Savings and Investment Union, and cross-border banking mergers.

"Reforms can be painful, but they pay off."
When asked whether Greece—following its experience with the debt crisis—could offer advice to Germany, Mr. Pierrakakis avoids positioning himself as a "teacher" to Berlin.

"I work very closely with Vice-Chancellor Lars Klingbeil. He is an excellent colleague and does not need advice from me," he states, noting that reforms that work in one country do not necessarily yield the same results in another.

However, he believes that the Greek experience can serve as a source of inspiration. As he notes, Greece managed to overcome "a decade of hardship" after facing an existential crisis.

"We are now close to a historic low in unemployment. We are achieving primary budget surpluses, and our economic growth rates are double the Eurozone average," he emphasizes.

The key takeaway from the Greek experience, according to him, is that "reforms may be painful at first, but they pay off both politically and economically."

"Germany is Europe's industrial engine"
The Eurogroup President remains optimistic about the prospects of the German economy, despite its prolonged lack of growth.
"Germany is Europe's industrial engine," he stresses, adding that it possesses immense potential to generate growth both domestically and across Europe as a whole.

At the same time, he points out that the country is in a strong position thanks to its comparatively low public debt and expresses confidence that the German government will proceed with the reforms it has announced—reforms that the business community is calling for.

On the rise in bond yields
Mr. Pierrakakis makes specific reference to the turmoil in international bond markets and the rise in yields. As he explains, the rise in yields is not a problem unique to the Eurozone but reflects factors affecting all major economies: higher energy prices, elevated inflation expectations, and strong global demand for capital—driven largely by investments in artificial intelligence.

He maintains that Eurozone fundamentals remain strong, while member states are able to secure financing at lower interest rates compared to the US or the UK. Spreads between Eurozone countries also remain contained.

However, this does not mean that the rise in interest rates is not a problem.

"Higher interest rates increase pressure on government budgets," he points out. The long average maturities of government bonds temporarily mitigate the impact, as current market rates feed into budgets only gradually. "This buys governments time, but it is no cause for complacency. Sound fiscal policy is becoming even more important."

The Eurogroup's three priorities
Mr. Pierrakakis outlines three key priorities for Eurozone economic policy.

First, states must ensure the sustainability of their public finances and adhere to agreed spending paths. Countries at risk of breaching the rules of the Stability and Growth Pact, he notes, should adopt additional fiscal consolidation measures.

Secondly, spending cuts alone are not enough. Public spending must contribute more to growth through targeted investments in productivity, energy, digitalization, and defense. Joint European procurement in the defense sector could, in his view, yield significant efficiency gains.

A third priority is rapid progress on the Savings and Investment Union, as the investments Europe needs cannot be financed solely by public budgets. "Europe needs to better mobilize private capital," he emphasizes.

"We do not have the luxury of waiting for the next crisis"
The Eurogroup President believes that Europe is currently better prepared for a new crisis than it was a decade ago.

He points out that the lessons learned from the sovereign debt crisis enabled the EU to respond more swiftly and effectively to the coronavirus pandemic 

...2020, but also following the Russian invasion of Ukraine.

However, he warns that the fiscal position of most countries is currently more strained than it was in 2022.

"We cannot afford the luxury of waiting until a crisis erupts," he states, calling for faster reforms within the European Single Market, particularly in the areas of capital markets, banking, and technology.

"Hidden tariff walls" within the EU
Of particular interest are the figures cited from an International Monetary Fund study regarding barriers within the European internal market.

According to the data, barriers to services between member states are equivalent to a 110% tariff, while for industrial goods, the equivalent is a 44% tariff.

"This represents enormous growth potential, and it is easy to harness. We simply need to remove the barriers—for instance, in capital markets," he points out.

At the same time, he notes that in 2024, the market capitalization of European markets stood at approximately 73% of EU GDP, compared to 270% in the US, highlighting the gap separating the two sides of the Atlantic. Banks: "We need European champions"
Regarding the contentious issue of a common European deposit guarantee scheme, Mr. Pierrakakis acknowledges that there is no agreement among member states yet.

He believes that Europe should initially focus on areas where rapid progress can be made, such as market integration, supervision, securitization, and the competitiveness of the banking sector.

He places particular emphasis on cross-border mergers and acquisitions, arguing that Greece has already demonstrated that this type of consolidation is both feasible and necessary.

He specifically cites UniCredit’s entry into Alpha Bank, the acquisition of the Greek telecommunications group by Deutsche Telekom, and the acquisition of the Athens Stock Exchange by Euronext—a move that, as he notes, offers access to a larger liquidity pool.

When asked specifically about the German government's opposition to the prospect of UniCredit acquiring Commerzbank, he declines to comment on that particular case.

However, he clearly articulates his position regarding the direction Europe should take:

"For every sector in Europe, cross-border consolidation is an existential necessity." We need European champions—as many as possible and as quickly as possible.