Francois Hollande: Grexit plan was no bluff
Former French president speaks to Kathimerini about the critical negotiations between Greece and the European Union in 2015
Greece came very close to exiting the eurozone in the summer of 2015, former French president Francois Hollande has admitted in an interview with Kathimerini. Grexit was no bluff. It was, he says, a Plan B that had been drafted, at the behest of German Chancellor Angela Merkel following the decision by Prime Minister Alexis Tsipras to hold a referendum on Greece’s bailout terms.
Hollande talks about the dramatic behind-the-scenes developments that led to the agreement for Greece’s third memorandum and emphasizes the French effort to ensure that the Plan B was never put on the table. “If Greece goes, who will be next? Are you sure you won’t be next?” was his key argument to Greece’s partners.
He also reserves high praise for the German chancellor for averting Grexit. “Angela Merkel was demanding but also patient. At the last minute, although she could have leaned toward the option of a Greek exit from the eurozone, something that many in her government were doubtlessly pressing her to do, she resisted and sought a credible and sustainable solution.” Mr President, how important were Greece and its problems during your tenure?
When I assumed the presidency in 2012, the case of Greece had already been preoccupying the offices of the European Council and the French Presidency for several months. And I worked all those years so that Greece could stay in the eurozone. I took part in countless meetings at the European Council, with Greek prime ministers and chiefly with Angela Merkel, who was occasionally a difficult partner in all those negotiations. What was your initial impression of Alexis Tsipras when he won the elections? Did you view him as a potential threat to the European status quo or a possible interlocutor?
I saw him as the leader of a government that was elected to launch a process of renegotiating the terms that had been imposed on Greece by the troika and which were extremely tough. I saw him as an interlocutor, and a serious one too, and not just because he had the right to be one. I deeply appreciated the fact that France was the first country Alexis Tsipras visited. I felt indebted, by the friendship that binds me with the Greek people and my respect for Alexis Tsipras, to do everything to ensure that Greece remains in the eurozone and to ease the harsh program that European authorities were demanding while restoring the country’s fiscal balance.
I was always honest with Alexis Tsipras and impressed upon him what he should expect in this process. I encouraged him to cooperate with European institutional bodies and with Mrs Merkel, to be a protagonist as well as a partner, not to isolate himself. What was your first piece of advice to him? Did you ever believe that he would suspend debt payments to force a solution? Did you ever believe that he considered Grexit during the period of former finance minister Yanis Varoufakis?
I had advised Alexis Tsipras to put his cards on the table with Angela Merkel, to show that he knew his own agenda, that he knew what the risks were in the event of a failure and what the guarantees would be for the imposition of commitments.
Angela Merkel was demanding but also patient. At the last minute, although she could have leaned toward the option of a Greek exit from the eurozone, something that many in her government were doubtlessly pressing her to do, she resisted and sought a credible and sustainable solution.
Blackmail is never a solution. However, it was necessary for Alexis Tsipras to highlight how painful the effort was already for his country and stress that he needed time to improve the finances that had deteriorated under his predecessors. If Alexis Tsipras had thought about leaving the eurozone, he never said so and never threatened to do so. How difficult was it to convince Merkel to give him a chance?
I took care to ensure that Angela Merkel was not drawn toward a solution that would have been against Europe’s interests. I was the one insisting on a search for a solution, but without Angela Merkel’s consent all my efforts would have been in vain. You had a dramatic meeting with Tsipras and Merkel shortly before the Greek PM called the referendum in the summer of 2015. What was said during that meeting? Did the referendum decision surprise you? What did you and Merkel tell Tsipras during the three-party telephone call on the day he called the plebiscite?
It was a particularly tense telephone conversation, because Angela Merkel and I had very much supported Alexis Tsipras and we had encouraged him to adopt the plan proposed by the Commission. However, he wanted a better deal and to support his country with a referendum in order to return to the negotiations with renewed strength. However, there was a risk that negotiations would collapse. At this point I again ensured that after the Greek vote we could reopen talks for Greece to stay in the eurozone and a new rescue program. It was not as self-evident as many deemed, particularly in Germany, that the natural consequence of the referendum should be the end of negotiations and Greece’s exit from the eurozone. I told Alexis this: “Help me, so I can help you.” On the night of the referendum you had several intense conversations with the Greek president. What did you discuss and what formula did you agree on to relaunch the dialogue with Tsipras?
My friend Prokopis Pavlopoulos, the Greek president, played a decisive role. He assured me that Greece is a staunchly European country and he asked me to believe that the Greek government would resume talks, which it did. Could you describe the phone call you had with Mr Tsipras on the night of the referendum result in Greece?
Yes, Tsipras had won the referendum but he had lost the trust of the Europeans. He could feel proud of convincing the Greeks to support him but also worried about the day after. That night I congratulated him on the result but I said that he would now face great difficulties. I told him: “If you want to keep Greece in the eurozone, you have to say so quickly. You have to start negotiations immediately. Help me help you. If you want a solution, I’ll help you.” And in the end he came to negotiate. Were you worried that Alexis Tsipras would leave the table of talks?
During the course of the night, we came close to disaster several times because one side or the other kept adding conditions. So we decided to restrict the discussion from the 19 members of the eurozone to Merkel, [European Council President Donald] Tusk, Tsipras, [European Commission President Jean-Claude] Juncker and myself. This smaller group allowed us to return to government leaders with an agreement that was eventually adopted in the early hours. You played a decisive role in averting Grexit. Has the threat gone completely? What mistakes did Europe make?
I had tried to convince our partners that a Greek exit would not only be a problem for Greece but for Europe as a whole because it could mean the dissolution of the eurozone. I warned them: “If Greece goes, who will be next? Are you sure you won’t be next?” I think that warning made it clear that solidarity is tantamount to stability. I never believed in a temporary Greek exit from the eurozone. It would have been a road with no return. With hindsight, we can say we were right, because the eurozone remained united and Greece honored all of its commitments. It achieved all the anticipated results, and more besides, especially as regards the fiscal surplus. Was the geopolitical situation a significant factor in the decision to keep Greece in the eurozone and what was the role of the US?
[Then US president] Barack Obama pressed hard for a solution to be found but the IMF did not help much, and particularly its representative in Greece. However, it was the job of the Europeans, and only them, to find a solution. As a known friend of Greece, how do you see its future and that of Tsipras?
France was deeply involved in establishing the presence and influence of Greece in the European Union. It was Valery Giscard d’Estaing who allowed Greece to enter the EU after the fall of the dictatorship. It was Francois Mitterrand who did everything to make Greece a fully fledged partner of the EU and Lionel Jospin who wanted Greece in the eurozone. As a socialist and as a Frenchman, I felt that I had inherited these important decisions. Alexis Tsipras is a courageous person, true to his commitments and a persistent negotiator. He has full knowledge of the issues he is dealing with. That was an advantage in the negotiations. He knew that, apart from the policies and principles he had to stand by, he also had to focus on details, and he did a great job with Finance Minister Euclid Tsakalotos. What was the most dramatic moment you recall from the whole experience?
The days leading to the referendum, because I knew there was a chance of a decisive rift. And the days that followed, because some could have used the result to provoke a rift. In a few hours, it was decided. The most decisive moment was undoubtedly the beginning of the European Council meeting when the finance ministers had failed to agree the day before. I announced then that the goal was to do everything possible to hold on to Greece, and Angela Merkel agreed.
I remember the handshake with Tsipras at the end of that long night. I told him that he had made it; he answered that the hardest part lay ahead for him as he would have to face Parliament and the Greek people. And he did it. I know what Europe owes to Greece. Apart from our history, it owes its culture, its democracy. Greece is not just any country in the EU. The continent without Greece would no longer be Europe. And Greece without Europe would not be the same.