×

CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO SITS DOWN WITH GREEK FINANCE MINISTER GIORGOS PAPACONSTANTINOU TODAY ON CNBC'S "SQUAWK ON THE STREET"

WHEN: TODAY, TUESDAY, MARCH 9TH AT 10AM ET

WHERE: CNBC'S "SQUAWK ON THE STREET"

Following is the unofficial transcript of a CNBC interview with Greek Finance Minister Giorgos Papaconstantinou today on CNBC's "Squawk on the Street." The interview will continue on CNBC's "Closing Bell with Maria Bartiromo" today at 4:30PM ET.

All references must be sourced to CNBC.

------------------------------------------------------

HAINES: THE GREEK PRIME MINISTER MEETING WITH PRESIDENT OBAMA TODAY AT THE WHITE HOUSE HE SAYS THE US CANNOT AFFORD TO IGNORE THE FINANCIAL ISSUES FACING GREECE AND THE EURO AND HE RECENTLY COMPARED CURRENCY SPECULATORS TO ASSISTS MARIA BARTIROMO IN NEW YORK TALKING TO GREECE FINANCE MINISTER MARIA

BARTIROMO: HI THERE MARK THANKS VERY MUCH WE ARE INDEED JOINED LIVE AHEAD OF HIS MEETING TO TALK TO US A LITTLE ABOUT HOW HE IS TRYING TO REASSURE INVESTORS RIGHT NOW. GIORGOS PAPACONSTANTINOU IS JOINING US LIVE.

PAPACONSTANTINOU: GOOD MORNING MARIA

BARTIROMO: CAN YOU TALK WITH US ABOUT YOUR EFFORTS IN TERMS OF TALKING WITH PRESIDENT OBAMA AND OTHER WORLD LEADERS IN TERMS OF REASSURING INVESTORS ABOUT THE FINANCES OF GREECE?

PAPACONSTANTINOU: YOU KNOW THAT GREECE HAS HAD A FISCAL CRISIS FOR SOME MONTHS NOW. WE CAME TO POWER IN OCTOBER ONLY TO DISCOVER THE DEFICIT WAS TWICE WHAT WAS ORIGINALLY REPORTED WE TOOK SOME DIFFICULT MEASURES AND HAD A PACKAGE THAT WAS PASSED IN PARLIAMENT LAST WEEK TO SHOW THE DETERMINATION OF A NEW GOVERNMENT TO ACTUALLY CLEAN UP AND IN THAT SENSE, WE'VE TALKED TO THE EUROPEAN LEADERS, THE FRENCH PRESIDENT, TO THE GERMAN CHANCELLOR. WE'RE HERE TO TALK TO THE U.S. PRESIDENT.

IT'S NOT -- GREECE IS DOING WHAT IT SHOULD TO BE DOING TO CLEAN UP ITS OWN MESS, HOWEVER, THERE'S A BROADER PROBLEM HERE.

IT'S A EUROPEAN PROBLEM. IT HAS TO DO WITH THE EURO AND IT HAS TO DO WITH SPECULATION. THESE ARE ALL ISSUES THAT INTEREST THE U.S. AS WELL.

BARTIROMO: LET'S TALK ABOUT SOME OF THOSE ISSUES. I WANT TO GET TO THAT SPECULATION AND TALK A LITTLE ABOUT WHAT'S HAPPENING ON THE GROUND. CAN YOU TELL ME SPECIFICALLY WHAT YOU'RE LOOKING FOR FROM PRESIDENT OBAMA?

PAPACONSTANTINOU: I THINK WHAT HAS BECOME CLEAR IN THIS WHOLE AFFAIR IS THAT OVER AND ABOVE THE FISCAL PROBLEMS THAT ANY COUNTRY HAS IN OUR CASE GREECE, THERE ARE QUESTIONS OF HOW THERE IS WHAT KIND OF USE WE MAKE, PEOPLE MAKE, OF THINGS LIKE CDSs, CREDIT DERIVATIVE SWAPS AND INTERNATIONAL MARKETS. HOW OPAQUE THEY ARE, NONTRANSPARENT. HOW IT'S NOT CLEAR WHO'S TRADING WHAT AND HOW THESE CAN PUSH COUNTRIES EVEN COUNTRIES THAT ARE DOING WHAT THEY SHOULD BE DOING TO BRING THEIR FINANCES UNDER CONTROL. CAN PUSH THEM TO THE BRINK THAT'S AN ISSUE WHICH REQUIRES A GLOBAL RESPONSE. WE'RE AT THE END OF A FINANCIAL CRISIS AND WE DON'T SEEM TO HAVE ACTUALLY TAKEN ALL THE LESSONS IN OF THAT FINANCIAL CRISIS AND THAT'S VERY SERIOUS AND IMPORTANT.

BARTIROMO: ARE YOU TALKING ABOUT MORE TRANSPARENCY AS IT RELATED TO DERIVATIVES AND CDS AND CERTAIN KINDS OF SWAPS AS YOU MENTIONED IS THAT WHAT YOU WOULD LIKE TO SEE?

PAPACONSTANTINOU: MORE TRANSPARENCY, A BAN OF NAKED SELLING OF CDSs, FOR EXAMPLE. WE SHOULD KNOW WHO IS TRADING, WHAT THEY'RE TRADING. AND UNFORTUNATELY IN A LOT OF THOSE SITUATIONS WE'RE NOT TALKING ABOUT A COMPLETE BAN WE ARE TALKING ABOUT RULES THAT MAKE THE MARKETS MORE TRANSPARENT AND LIMIT THE USE THAT IT CAN BE MADE OF THESE INSTRUMENTS TO BASICALLY CORNER COUNTRIES THAT BEYOND WHAT SHOULD BE DONE IN A NORMAL FUNCTION OF MARKETS.

BARTIROMO: ASIDE FROM SPECIFIC REFORM AS IT RELATES TO THE FINANCIAL SERVICES INDUSTRY, WHICH OF COURSE CHANGING THE CDS TRANSPARENCY WOULD FALL UNDER, WHAT KIND OF FINANCIAL RESCUE WOULD YOU LIKE TO SEE FROM THE U.S. AND OTHER NATIONS?

PAPACONSTANTINOU: WE'RE NOT LOOKING FOR ANY FINANCIAL RESCUE. WE'RE TRYING TO BORROW ON INTERNATIONAL MARKETS ON OUR OWN TERMS. IT'S JUST THAT AT THE MOMENT, WE'RE BORROWING AT THE HIGH COST. WE HAD A TEN-YEAR GOVERNMENT BOND ISSUE LAST WEEK WHICH WENT VERY WELL, HOWEVER, WITH AN INTEREST RATE EXCEEDING 6%. IT'S CLEAR WE CANNOT CONTINUE BORROWING AT THOSE RATES BECAUSE WE'RE PAYING INTEREST WHAT WE ARE GAINING TERMS OF VERY PAINFUL WAGE CUTS IN THE PUBLIC SECTOR AND INCREASES IN TAXES THAT AFFECT ALL GREEK CITIZENS. WE'RE TRYING TO NORMALIZE THIS ENVIRONMENT THIS BORROWING ENVIRONMENT AND CONTINUE BORROWING IN INTERNATIONAL MARKETS ON OUR OWN WITHOUT THE HELP OF ANYBODY ELSE.

BARTIROMO: TELL ME ABOUT THAT BORROWING AND HOW YOU PLAN TO CUT DOWN THE HEAVY DEBT THAT GREECE IS FACING RIGHT NOW WHAT IS YOUR AGENDA.

PAPACONSTANTINOU: YOU KNOW, WE HAVE A 12.7% DEFICIT IN 2009 AND A THREE-YEAR PLAN THAT WE HAVE AGREED WITH OUR EUROPEAN PARTNERS TO BRING THAT DOWN TO LESS THAN 3% BY THE END OF 2012. IT'S A FRONT LOADED APPROACH WHERE IN THIS YEAR WE NEED TO REDUCE IT BY FOUR PERCENTAGE POINTS. FROM NEXT YEAR, HAVE A DE-ESCALATION OF DEBT TO GDP RATIO. THAT'S NOT AN EASY TASK.

WE WILL DO IT WITH A VERY SPECIFIC LIST OF MEASURES THAT WE HAVE EXPLAINED TO OUR EUROPEAN PARTNERS. THEY INCLUDE INCREASES IN RATES AND EXCESS TAXES ON FUEL, CIGARETTES, TOBACCO AND NOMINAL WAGE CUTS TO THE PUBLIC SECTOR. AT THE SAME TIME, WE'VE OPENED UP BIG REFORM EFFORTS TAX REFORM, BUDGET REFORM SOCIAL SECURITY REFORM WHICH WILL PAY OFF IN THE FOLLOWING YEARS AND WHICH WILL HELP US BRING OVER ALL THE FISCAL SITUATION IN BALANCE IN THE NEXT FEW YEARS.

BARTIROMO: AND OF COURSE TAX INCREASES AND BUDGET REFORM AND WAGE CUTS HAVE ALSO UNNERVED THE PEOPLE ON THE GROUND AS YOU TRAVEL HERE IN WASHINGTON, YOU'VE GOT PEOPLE TAKING TO THE STREETS IN TERMS OF STRIKING, STRIKES IN THE STREETS OF ATHENS RIGHT NOW. HOW ARE YOU GOING TO CALM DOWN THE SOCIAL UNREST?

PAPACONSTANTINOU: WELL, I THINK THAT IT WOULD -- IT'S TOTALLY NORMAL AND IT'S EXPECTED OF COURSE FOR THESE KINDS OF REACTIONS TO -- WE ARE DOING SOMETHING WHICH IS DIFFICULT AND WHICH WILL AFFECT CITIZENS. WOULD HAVE MUCH PREFERRED TO NOT HAVE CUT NOMINAL WAGES AND ALLOW THE KIND OF REFORMS THAT WE ARE UNDERGOING TO SHOW THEIR AFFECT AND WITHOUT THESE KINDS OF UNPOPULAR MEASURES. HOWEVER, WE HAVE TO SHOW A VERY CLEAR MESSAGE OF DETERMINATION AND TO IMMEDIATELY CUT THE DEFICIT.

AND THIS IS WHY WE DID THAT. NOW, WE DO HAVE PARLIAMENTARY A MAJORITY. WE HAVE AN ABSOLUTELY PARLIAMENT MAJORITY. A BROAD MAJORITY IN PARLIAMENT WE PASSED THESE MEASURES A FEW DAYS AGO, SO THERE IS NO QUESTION OF US NOT SUCCEEDING. AND IT IS VERY ENCOURAGING THAT OPINION POLLS, EVEN THOUGH OF COURSE WHEN PEOPLE ARE ASKED, DO YOU AGREE WITH A WAGE CUT AND THE ANSWER IS OBVIOUSLY NO. BROADLY, THEY SEEM TO BE SUPPORTING WHAT WE ARE DOING AND THEY UNDERSTAND THIS IS A NATIONAL CRISIS. IN A NATIONAL CRISIS, YOU HAVE TO MAKE DIFFICULT DECISIONS, UNPOPULAR DECISIONS, BUT THAT'S THE ONLY WAY TO GO FORWARD.

BARTIROMO: LET ME ASK YOU THIS SIR, CAN YOU REALLY CATEGORICALLY SAY THERE IS NO WAY THAT THIS IS NOT GOING TO WORK? YOU SAID BECAUSE YOU HAVE THE MAJORITY IN TERMS OF PARLIAMENT, BUT WHEN YOU LOOK AT THE MEASURES, VAT TAX INCREASES AND OTHER TAX INCREASES, WAGE CUT, SPENDING CUTS, WHAT'S PLAN B? WHAT IF YOU DON'T ACTUALLY GET THE PROPER NUMBER IN TERMS OF CASH TO ALLEVIATE THAT $75 BILLION DEBT? DO YOU HAVE A PLAN B?

PAPACONSTANTINOU: WELL, ACTUALLY, THE KIND OF MEASURES THAT WERE PUT ON THE TABLE GO OVER AND ABOVE THE TARGET THAT WE HAVE FOR THIS YEAR. THE TARGET THAT HAS BEEN SET, WE'VE SET TOGETHER WITH OUR EUROPEAN PARTNERS IS A REDUCTION OF FOUR PERCENTAGE POINTS. THE MEASURES ON THE TABLE GO ABOVE SIX PERCENTAGE POINTS, SO WE HAVE A CUSHION BASICALLY JUST TO MAKE ABSOLUTELY SURE THAT IF THERE IS SOME PROBLEM IN ONE OF THE MEASURES OR IF THE RECOVERY TAKES A LONGER TIME TO APPEAR AND THEREFORE TAX REVENUES ARE NOT AS HIGH AS WE HOPED, THERE WILL BE OTHER MEASURES TO COMPENSATE. SO THERE IS ABSOLUTELY NO QUESTION THAT THIS TARGET WILL BE MET.

BARTIROMO: LET ME BRING IN DAVID FABER.

FABER: THANKS MARIA. JUST A QUICK QUESTION SIR. YOU KNOW, SOME INVESTORS ARE OUT THERE, THEY LOOK AT GREECE OVER THE LAST 200 YEARS. THE COMPANY HAS BEEN IN DEFAULT ON SOVEREIGN CLAIMS NUMEROUS TIMES OVER THAT LONG TIME PERIOD. YOU HAVEN'T RUN A FISCAL SURPLUS IN THIRTY YEARS YOUR REAL WAGES HAVE DOUBLED OVER THE LAST TEN YEARS VERSUS GERMANY, WHICH HAVE STAYED FLAT. WHEN THEY HEAR YOU TALK ABOUT YOUR EFFORTS, WHY SHOULD THEY BELIEVE YOU GIVEN THE HISTORY GREECE HAS HAD?

PAPACONSTANTINOU: FIRST OF ALL IT'S INTERESTING TO SEE THAT THERE ARE INVESTORS THAT HAVE BEEN FOLLOWING THE COUNTRY FOR 200 YEARS. BUT, THE TRUTH OF THE MATTER IS THAT GREECE IS A CATCHING UP ECONOMY AND THE INCREASE IN THE REAL WAGES YOU MENTIONED IS BECAUSE WE'VE HAD REAL GDP GROWTH, WHICH HAS BEEN VERY HIGH. EXCEEDING THE AVERAGE, A FEW YEARS AGO WE WERE THE FASTEST GROWING ECONOMY IN EUROPE. SO ITS, WAGES, SALARIES AND INCOMES HAVE BEEN CATCHING UP FOR THE REST OF EUROPE. THAT'S NORMAL, PRODUCTIVITY HAS BEEN GOING UP. NOW, THERE HAVE BEEN EXCESSES, INCREASES IN THE PUBLIC SECTOR OVER AND ABOVE AND I THINK THAT'S THE KIND OF THINGS THAT THE MARKETS ARE LOOKING AT THE MOMENT AND THEY'RE LOOKING AT THAT DETERMINATION TO CONTROL THOSE EXCESSES. BUT YOU KNOW AT THE END OF THE DAY, THE BIGGEST DEFICIT THAT WE FACE, AND WE HAVE SAID THIS VERY CLEARLY, IS THE CREDIBILITY DEFICIT. BECAUSE, AS YOU SAY, PEOPLE OFTEN DON'T BELIEVE OUR DATA BECAUSE IT WAS CLEAR THAT IN THE PAST THE DATA THAT WAS PRODUCED WAS NOT REFLECTING REALITY. THEY DON'T BELIEVE THAT WE WILL BE SUCCESSFUL. WELL, I CAN ONLY SAY THAT IN FIVE SHORT MONTHS, WE'VE SHOWN A DETERMINATION THAT I DON'T THINK HAS BEEN THERE BEFORE. WE'VE TAKEN VERY UNPOPULAR MEASURES. THE MARKETS SEEM TO BE REACTING. THEY SEEM TO BE REACTING POSITIVELY TO THIS. EUROPEAN PARTNERS HAS BEEN A CHANGE IN ATTITUDES SINCE LAST WEEK WHEN WE ANNOUNCED THESE NEW MEASURES, WITH LOTS OF WORDS OF PRAISE. AND THE GREEK PEOPLE SEEM TO BE BEHIND US IN WHAT IS A VERY DIFFICULT EFFORT. TIME WILL TELL.

BARTIROMO: MINSTER PAPACONSTANTINOU WE WANT TO CONTINUE TALKING WITH YOU ON THE CLOSING BELL. I WANT TO TALK TO YOU ABOUT THE BANKS THAT HAVE THE MOST EXPOSURE AND THE RIPPLE EFFECTS THROUGHOUT THE EURO ZONE, BUT FOR OUR LIVE PROGRAM, WE APPRECIATE YOUR TIME. THANKS FOR JOINING US.

PAPACONSTANTINOU: THANK YOU.

BURNETT: ACTUALLY SORRY, WE JUST WANT TO JUMP IN ONE MORE QUESTION HERE SORRY MARIA.

BARTIROMO: NO WORRIES.

BURNETT: SIR, ONE QUESTION. I KNOW MARIA'S GOING TO BE TALKING MORE ABOUT THE BANKS, BUT WHAT ABOUT GOLDMAN SACHS? THERE'S BEEN A LOT OF COVERAGE IN THIS COUNTRY ABOUT THE FACT THAT THEY ARRANGED SWAPS THAT ENABLED GREECE TO MASK DEBT AS SOMETHING ELSE. DO YOU THINK GOLDMAN SACHS IS PARTLY RESPONSIBLE FOR THE FISCAL SITUATION YOU'RE IN?

PAPACONSTANTINOU: I THINK THAT WOULD BE STRETCHING IT. IT'S WHAT THIS PARTICULAR BANK DID WAS A PARTICULAR OPERATION WHICH AT THE TIME, WAS FULLY LEGAL AND WITHIN EURO STAT RULES. SIMILAR OPERATIONS WERE DONE IN OTHER COUNTRIES. UNFORTUNATELY, THIS PARTICULAR OPERATION GOT A LOT OF PUBLICITY BECAUSE IT CAME IN THE MIDDLE OF GREECE'S FINANCIAL AND FISCAL WOES. THERE'S NO QUESTION ABOUT THAT.

BARTIROMO: THANKS VERY MUCH, SIR. WE'LL SEE YOU SOON AND WE WILL SEE YOU TODAY ON THE CLOSING BELL AT 3:00 P.M. EASTERN. THANKS FOR JOINING US.

PAPACONSTANTINOU: THANK YOU.

About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.