Alexis Tsipras appoints radical economist to new government

Jan 27 2015

Jon Henley in Athens – The Guardian

Greece set to clash with EU as economics post goes to radical who described austerity measures as ?fiscal waterboarding?

Greece?s new leftist prime minister, Alexis Tsipras, is set to announce his anti-bailout government, with the post of economics minister ? chief negotiator with the country?s international creditors ? going to a radical economist who has described austerity programmes as ?fiscal waterboarding?.

With Greece set on a collision course with Europe over the Syriza-led government?s plans to reverse draconian belt-tightening and renegotiate the country?s massive debts, Yanis Varoufakis, who calls himself an ?accidental economist?, confirmed in a radio interview that he would take up the key position.

The new Greek government, the first in Europe to openly oppose the draconian bailout conditions demanded by the European Union and International Monetary Fund, is expected to be unveiled and sworn in on Tuesday afternoon.

?This is happening today, we shall be sworn in later today,? Varoufakis told Irish radio station Newstalk, when asked if he would be finance minister.

One of his top priorities will be to deliver on Tsipras?s election pledge to renegotiate the terms of Greece?s ?240bn bailout deal, despite widespread and sometimes forceful opposition from other European countries, led by Germany.

Varoufakis, 53, studied in Britain and has also taught in Australia, Greece and the US. In pre-election interviews he promised to end what he described as Greece?s humanitarian crisis, slice a chunk off its ?320bn debt mountain, and destroy the country?s oligarchs who ?viciously suck the energy and the economic power from everybody else?.

A prolific blogger and media commentator who dresses in brightly coloured shirts and jeans, Varoufakis ? who has dual Greek and Australian nationality ? abandoned a job at the University of Texas to join Tsipras?s team in the election runup, and celebrated Sunday?s result by paraphrasing Welsh poet Dylan Thomas, saying: ?Greek democracy today chose to stop going gently into the night. Greek democracy resolved to rage against the dying of the light.?

Syriza failed by just two seats to win an outright majority in Greece?s 300-seat parliament and on Monday formed a coalition government with the small rightwing Independent Greeks (Anel) party.

Analysts have described it as an unnatural alliance and warned it might not survive long, pointing out that ANEL – best-known for vitriolic attacks on Germany and the Troika and for the occasional unashamedly antisemitic, racist and homophobic outbursts of its populist leader, Panos Kammenos ? are unpredictable and that the two parties, while they agree on the need to end austerity, hold directly opposing views on many key social issues including immigration.

While the IMF said it was ready to continue supporting Greece and looked forward to discussions with the new government, the head of the European commission, Jean-Claude Juncker, warned that a reduction in the country?s debt was ?not on the radar?. The EU issued a stiff statement that Greece would risk its place in the eurozone if it fails to meet its austerity and debt commitments.

Syriza has promised to reverse many of the huge public-sector spending cuts and wage and pension reductions implemented by the previous centre-right government, but several eurozone countries made clear they thought its plans were unrealistic.

?In our view it is important for the new government to take action to foster Greece?s continued economic recovery,? Steffen Seibert, a spokesman for the German chancellor, Angela Merkel?, said. ?That also means Greece sticking to its previous commitments.?

The British prime minister, David Cameron, was more conciliatory on Monday night, congratulating Tsipras and welcoming his ?intention to tackle corruption and increase tax transparency across Greece?.

But the UK chancellor, George Osborne, said Syriza?s promises to voters appeared ?very difficult to deliver? and ?incompatible with what the eurozone currently demands?, warning that any resulting uncertainty would have an impact on Britain.

Varoufakis has long criticised Europe?s handling of the economic crisis, attacking the conservative economic orthodoxy that demands budget rigour and market-friendly structural reforms.

That approach amounted to ?a cynical transfer of banking losses on to the shoulders of the weakest taxpayers?, he said on his blog earlier this month. He has also likened the tough terms of bailout deals to ?fiscal waterboarding? that risked converting southern Europe into ?a form of Victorian workhouse?.


Profile: Greece?s new finance minister Yanis Varoufakis

Phillip Inman and Katie Allen – The Guardian

The self-proclaimed ?accidental economist? is expected to adopt a constructive approach to tough debt negotiations

Yanis Varoufakis, 53, is known for his running commentary on the financial crisis in a series of blogposts that have won him thousands of Twitter followers and the respect of Syriza?s leadership.

John Maynard Keynes with a hint of Karl Marx is how one analyst described the self-proclaimed ?accidental economist? who is now to become Greece?s finance minister and a key negotiator with its international creditors.

With a typically literary flourish, he celebrated his party?s victory by paraphrasing Welsh poet Dylan Thomas.

?Greek democracy today chose to stop going gently into the night. Greek democracy resolved to rage against the dying of the light,? the Greek-Australian wrote on his blog.

One of the first two ministers to be confirmed by prime minister Alexis Tsipras, Varoufakis studied at Essex University and has taught in Australia, Greece and the United States. In pre-election interviews he vowed to destroy Greek oligarchs, end what he called the humanitarian crisis in Greece and renegotiate the country?s debt mountain.

?We are going to destroy the basis upon which they have built for decade after decade a system, a network that viciously sucks the energy and the economic power from everybody else in society,? he told Britain?s Channel 4 television.

But the muted market reaction to Syriza?s decisive win was at least in part because investors expect the thoughtful powerbroker to adopt a more emollient style ahead of tough negotiations.

Writing before the election, Paolo Pizzoli, senior economist at ING Financial Markets in Milan, highlighted the economics professor?s ?constructive attitude? after he talked about the need to ?minimise conflict and maximise the chances of a mutually beneficial agreement?.

?We believe that, if in power, Syriza could prove more pragmatic than many anticipated,? said Pizzoli.

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