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Lyubov Panayotova is Director of the European Institute Foundation. She holds master's degrees in Electronic Engineering and Financial Management, she has specialised in Effective Management and Administration. She deals with various aspects of international activities and the process of Bulgaria’s accession to the European Union. She participated in the negotiations on the Central European Free Trade Agreement, the European Free Trade Area and in many bilateral agreements for commercial investment. Lyubov Panayotova talks with Polina Spartyanova.
    Why do Prime Minister Alexis Tsipras and Minister of Finance Yanis Varoufakis provoke so many comments and reactions with regard to their behaviour and appearance?
    It is a bit difficult to talk about their appearance. This is perhaps the desire of a professor with extreme liberal views to have a slightly different style of behaviour in a council that is said to be one of the most conservative councils. The Eurogroup generally is the most traditional council that unites people with great financial experience and specific ideas. It is no coincidence that this council is called a club in Brussels, not a council. Regardless of the political factions and struggles of the different governments that dominate in the separate countries, they speak one language in it and understand each other very easily. This was the standard practice and naturally, Varoufakis is now breaking it up a little.
    However, their difficulties do not stem from this. Tsipras and Varoufakis made very serious promises before Greek voters who did not realise that they could not be kept or that they were swept away by populism. Now reality and collision show that pre-election slogans and promises are one thing whereas reality is quite different when one comes to power. I think both have no administrative and managerial experience, since being a member, be it European or national, is not the same as heading a particular ministry, not to speak of being a prime minister. You have to have the right reflection on a particular point.
    What is their goal? Why are they so consistent in their attempts to set their European partners against themselves?
    I do not think that their goal is to set the partners against themselves. They want to show that it is possible to carry out a different policy. This topic, namely the end of the policy of austerity, has been very seriously raised. This policy was at the heart of all public debates, when those willing to preside the new European Commission, i.e. to take up the 5-year term, appeared. The debates were very strong two years ago too, when they elected a president in France, which is one of the main countries and drivers of the EU. This issue has been on the table for a long time, since the beginning of the crisis. Even though the figures show that some of the countries that were most affected by this crisis have started to overcome it, reporting economic growth, the people cannot directly feel the change. Citizens are out of patience already. On the one hand, it is not properly explained what is being done with all these austerity measures and I think that they rather want to be able to impose their view that it will be easier for them to emerge from the crisis and be able to more easily repay their duties. Here, despite all the rhetoric, no one has said that Greece will not repay its obligations. A transition period, extension is required, letters are being written requesting more flexible lenders and commission, and generally, everything is associated with it. This is the difference between the extreme left and the extreme right. Various things can be negotiated with the extreme left, which I do not favour, because it does not want the destruction of Europe. Tsipras himself wants to show a new face of this union. As for the extreme right, it does not want Europe but its division. Even if Greece leaves, or if it has to leave, the euro zone to solve its problems, devalue its currency, clear the loans granted by the euro zone, that does not mean that it leaves Europe. I do not think this is what Prime Minister Tsipras wants.
    Naturally, the negotiations will be difficult because conservatism in financial circles is very strong on the one hand and they do not want to arrive at a precedent on the other, because Spain or Ireland will want the same afterwards. This will result in a spiral, which will be very difficult to manage.
    Do you think the behaviour and appearance are part of a deliberate strategy for a firm course of negotiations with the European Union? If so, what are the pros and cons of such a strategy?
    It is very difficult to say that this is a deliberate strategy because the behaviour and appearance of the Minister of Finance are peculiar to him, they are part of his nature. The fact that he does not consider how to react in certain moments and in certain places where he appears for the first time shows that he has yet to learn or his colleagues will learn to accept precisely that kind of behaviour. However, I do not think this is successful at this point. Everything that happened last week shows that no concession will be easily made in this aspect. The Greek side will have to make much more effort and to show why a particular approach is better and how it will help the repayment of obligations.
    Is there a danger for other euro zone member states to take the course of Greece?
    There is a probability of certain populist leaders in the borrowing countries sparking discontent among people, which cannot always be controlled and be subject to any social and just causes. The thing is not to destroy Europe, but to work for a stronger European Union.
    How do you think these negotiations should have begun and more importantly, in what direction should the Greek government have led them?
    The bad thing is that the government of SYRIZA came when it was urgent to start negotiations, at that time when it was not good for it. If it had a little more time, since some payments are due in August, for example if it had six months in which to deal with domestic issues, fulfil some of the promises, no matter how painful and difficult the reforms and changes in the privatisation packages would be, perhaps it would have been much easier for it to negotiate later. Now, the government is between two blades: on the one hand, we have the expectations of Greek voters who stood behind this platform on a mass scale, expecting a firm position to Brussels and on the other, the persistence on the part of lenders, which is reasonable because there is no free lunch. There is no existence without this international community and it cannot just forgive certain obligations. On the one hand, the government risks not receiving the financial help and support that it needs, because it has nothing else to do, and on the other, it risks sinking in its own electorate’s estimation, which is very difficult.
    What should they have done, according to you, so that it would be painless for Greece?
    There is no painless option for Greece. The reforms and positives in recent years were apparent for the International Monetary Fund, including on paper at a macro level. But citizens and ordinary people who have lost their jobs and who continue to go through difficult times cannot feel these positives. They should have been told that the austerity would last for another two years at least but nobody wanted to say it during the pre-election campaign. Those people who are not active in politics and do not follow things in detail want to feel the difference and it is a matter of honour and normal policy to tell the truth. But you are not always popular then.
    How do you evaluate the behaviour of the European partners and what will they do in the end in your opinion?
    I think that, ultimately, they will become a little more flexible if they succeed, in cooperation with the Commission and the IMF, to soften the restrictions that are required for the implementation of the programme for Greece so that it becomes a little more acceptable and can be presented in internal political terms, so that the newly elected government does not lose face. They will not yield. 
    Alexis Tsipras does not want to destroy Europe or Greece and I think he is aware that Greece cannot do without Europe. He will also make certain concessions and provide for steps, but they have to be traded so that he neither loses face in domestic politics, nor very quickly disappoints the people, so as not to cause political instability again, as now this will be the worst thing for Greece.
     Bulgaria had to implement many of the reforms that Greece must now carry out to be accepted as a member of the European Union. Why was Greece adopted in the euro zone without fulfilling the required conditions?
    This is a difficult question; at that time, it was a political decision for the moment. Perhaps it was due to the excessive liberalism in the union, as the majority of governments at the time were liberal-democratic. Precisely at that time there was the rise of the liberal idea, in the 1990s - the free market, the absence of any regulations. It turned out that this was not the idea that would lead the EU to move forward and the common market to function properly, including the euro zone. This was not the idea that we thought could make Europe even with the United States or the Asian countries where traditions are much stronger.
    Along with these hard liberal ideas, Europe is bearing another heavy burden, namely the social package that we want to maintain, because it relates to the standard of living to which Europeans are accustomed and which they want to keep.
    Bulgaria went through a very difficult period before accessing the European Union and starting the negotiations, as we were also almost bankrupt at some point. We went through a period of economic crisis, when 18 banks went bankrupt and closed down - about 70% of the banking sector at the time. There was a policy of dictation on the part of the IMF to complete the entire privatisation at a fast pace to obtain the relevant funds. There was a negative attitude here too and negative views of this period are still being expressed. The democratic government of this period was very bold to carry out these reforms within two years or so in order for Bulgaria to catch up with the other 8 post-communist countries that negotiated the fifth expansion and not to fall out like Serbia and Macedonia, awaiting another expansion that was not expected soon. This government and its politicians never returned to power, this is the political skill. Being a good leader on the one hand, who knows what will be good for his country, so that he will remain in history, but not always in politics. I think this is a very serious challenge to the young Greek prime minister.
    Do you think that the European partners are tending towards making an exception for Greece once again and, if so, why?

     I do not think they are willing to make an exception. Flexibility, for example, is not an exception, but as requested by German Finance Minister Schaeuble, it must be shown that the reforms are really tied to the specifics of payments and instalments, i.e. he wants some clearer evidence that the reforms will be carried out. This is not a retreat - this is part of the negotiation process and of the normalization and recovery of the country. The write-off and forgiveness that were part of the pre-election campaign of SYRIZA will not happen, because they will set a precedent in this crisis, in which other countries continue to tighten their belts and to fight against these measures, they will spoil the fiscal discipline that exists in other countries