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New Greek Government Names Anti-Austerity Economist as Finance Minister New Greek Leader’s Cabinet Signals Willingness to Confront E.U.
(about 4 hours later)
ATHENS — The leftist-led coalition that won Greece’s elections unveiled its government on Tuesday, with the crucial post of finance minister going to an economist who has called the eurozone’s austerity policies “fiscal waterboarding.” ATHENS — From the makeup of his cabinet to an early warning sent to the European Union over Russia policy, Greece’s new prime minister, Alexis Tsipras, on Tuesday signaled a sharp shift in direction for Greece as he unveiled the first government led from the far left in the country’s modern history.
The new finance minister, Yanis Varoufakis, a professor and avid blogger, will confront Greece’s international creditors in tough talks over the austerity policies, widely despised by the Greeks. Those talks could have profound consequences for Greece, the future of the euro currency and the financial integration of the European Union. Two days after he ousted Greek’s conservative government in an emphatic election victory, Mr. Tsipras, 40, assembled a new, streamlined cabinet dominated by members of his radical-left Syriza party, among them academics, labor activists and human rights advocates.
Twenty-two ministries have been streamlined to 10 in the new cabinet, all but one held by members of Syriza, the radical-left party that won the most votes in the Sunday elections and that has vowed to renegotiate the country’s onerous debts. His most closely watched selection was his new finance minister, Yanis Varoufakis, an economist and avid blogger who has described Europe’s austerity policies as “fiscal waterboarding.”
The Defense Ministry post went to Panos Kammenos, the leader of Syriza’s coalition partner, the right-wing Independent Greeks, and a handful of deputy posts went to his colleagues. European leaders began to send their congratulations on Tuesday, after a mostly chilly initial response to the victory by Syriza, which is demanding a renegotiation of the tough terms of Europe’s 240 billion euro bailout of Greece.
But the most important post filled by the new prime minister, Alexis Tsipras, the 40-year-old leader of Syriza, was his choice of finance minister: Mr. Varoufakis, 53, who left a teaching post at the University of Texas to join Syriza’s election campaign. He has also served as a consultant to the online gaming company, Valve, and as a visiting professor at the University of Athens. Chancellor Angela Merkel of Germany wished him “much strength and success,” if also noting that “you are taking office in a difficult time in which you face great responsibility.”
Besides his strong opposition to both austerity in the eurozone and the current terms for repaying Greece’s debts, Mr. Varoufakis has vowed to crack down on the country’s oligarchs and alleviate what has been called a humanitarian crisis. Mr. Tsipras quickly demonstrated that Europe must not treat Greece as a weak junior partner. His government on Tuesday denounced a European Council statement in which European leaders blamed Russia for the escalating violence in Ukraine and raised the prospect of new economic sanctions.
Mr. Varoufakis faces formidable opposition from other eurozone finance ministers, who met in Brussels on Monday. While they said they would talk with the new Greek government on the terms of continued financial aid, they expressed opposition to any debt relief, for the time being at least. In its own statement, Mr. Tsipras’s office said the European statement had been issued “without the consent of Greece.” The prime minister also complained by telephone to Federica Mogherini, the European Union’s foreign policy chief.
On Tuesday, Chancellor Angela Merkel of Germany struck a more conciliatory tone in a statement congratulating Mr. Tsipras on his election, wishing him “much strength and success” while noting that “you are taking office in a difficult time in which you face great responsibility.” Mr. Tsipras has been a sharp critic of European sanctions against Moscow, and has also displayed past good will toward Russia, a sentiment common among many Greeks. President Vladimir V. Putin of Russia sent Mr. Tsipras a congratulatory telegram on Monday, the day he was sworn into office, while that same day Mr. Tsipras met the Russian ambassador in Athens.
Mr. Varoufakis’s predecessors, Yannis Stournaras and Gikas Hardouvelis, were instrumental in imposing the tough austerity policies demanded by a so-called troika of international creditors — the European Commission, the European Central Bank and the International Monetary Fund. The creditors have given Greece two bailouts worth 240 billion euros since 2010 in exchange for punishing cutbacks that have slashed household incomes by a third and fueled a fierce public backlash against the austerity measures. Having a Greek prime minister with a strongly dissenting view on Russian sanctions could greatly complicate European Union foreign policy, which has benefited from a German-led unanimity among heads of state on confronting Mr. Putin.
Greece’s new finance minister is to work closely with Giannis Dragasakis, a founder of Syriza and the only member of the party’s elite with experience in government, having served as deputy finance minister in a short-lived unity government more than two decades ago. Now in the post of deputy prime minister, Mr. Dragasakis, 68, will oversee the enforcement of economic policy and negotiations with the troika of lenders. Further sanctions cannot be approved without a unanimous vote from the leaders of European Union member nations, and Mr. Tsipras might find sympathetic partners in countries like Hungary or Slovakia, which dislike sanctions but generally go along.
Another important post went to an economist, Giorgos Stathakis, who takes over an expanded ministry encompassing economy, infrastructure, shipping and tourism. A deputy minister from the Independent Greeks was appointed to focus on tourism, one of the few sectors shoring up the fragile Greek economy. Political analysts in Athens interpreted Mr. Tsipras early warning shots as clever political positioning, given that his government will soon open negotiations with the country’s European creditors over the punishing bailout provisions. Showing that he could complicate European goals in Ukraine could provide him leverage in his economic negotiations, analysts said.
The new government spokesman is Gavriil Sakellaridis, 34, Syriza’s runner-up in last year’s contest for Athens mayor. He takes over from Panos Skourletis, who is to become the labor minister, with a deputy to focus on reducing unemployment, which remains close to 26 percent. The job of foreign minister went to Nikos Kotzias, a respected academic and former head of an influential Greek research organization. “He’s maneuvering all the time,” said Stelios Kouloglou, a political commentator who last year ran an unsuccessful campaign with Syriza for the European Parliament. “But he has a main direction.”
The coalition also tapped Yannis Panousis, a criminologist allied with the center-left party Democratic Left, which did not make it into Parliament in Sunday’s elections. He is to take the role of public order minister under a broader Interior Ministry led by Nikos Voutsis, a prominent Syriza official. That direction is forcing Europe to ease the bailout’s tough, belt-tightening conditions, which have crippled the Greek economy and contributed to rampant joblessness, foreclosures and shuttered businesses.
A new ministry, for fighting corruption, is to be led by the former head of Greece’s anti-money-laundering authority, Panagiotis Nikoloudis, as Syriza seeks to make good on pledges to curb the graft and wasteful spending widely perceived to have created Greece’s debt crisis. Political opponents have warned that Syriza’s leftist roots would infuse Mr. Tsipras’s government with a populist, radical agenda.
Syriza’s hard-left faction, known as the Left Platform, which has questioned Greece’s continued presence in the eurozone, will be represented in the government by the outspoken Panagiotis Lafazanis who took the post of environment and energy. Costas Karagounis, a spokesman for the New Democracy, the defeated conservative party, warned that some cabinet members had “expressed dangerous views” on economic growth and privatization.
In another jolt to the Greek establishment, the new government proposed that the role of Parliament speaker go to Zoe Konstantopoulou of Syriza, a tough-talking lawyer who has had furious clashes in the House with leading figures from the two main parties that dominated Greek politics for decades, New Democracy and Pasok. But the broader public reaction to the new government seemed to be one of elation, if also concern about the future.
The appointment must be approved by a vote in Parliament. Mr. Tsipras worked assiduously in the weeks before Sunday’s elections to reassure Greek voters that he was not a wild-eyed radical but that he would defend Greek interests and reverse the most punitive aspects of the bailout conditions.
“Syriza is a new reality in a new Europe,” said Panagiotis Kouroumplis, the country’s new health minister, in an interview. “We don’t want to disintegrate Europe. We believe there will be voices who will listen to Syriza.”
He added: “What is most frustrating to citizens is they see wealth being created in Europe but that wealth is being distributed to just a few, instead of equally.”
Mr. Kouloglou, the political analyst, predicted that the new government would steadily target the oligarchical businesses that have dominated the Greek economy and enjoyed close political ties to past governments — and which actively opposed Mr. Tsipras’s campaign.
“He has no reason to pay them back or to make a compromise,” Mr. Kouloglou said. “He was not given a gift, and he is not obliged to give a gift back.”
In assembling the new cabinet, Mr. Tsipras streamlined the number of ministries but he did create a new one to fight corruption, led by the former head of Greece’s anti-money laundering authority.
He also gave the job of defense minister to Panos Kammenos, the leader of the small, center-right party, Independent Greeks, with which Syriza formed a coalition to achieve a parliamentary majority.
Even as many Greek leftists winced at Mr. Kammenos holding such a prominent position, some analysts saw the move as further evidence that Mr. Tsipras was more a dealmaker than a leftist ideologue, and that his party’s primary focus would be formidable task of confronting Europe over the bailout and reviving the Greek economy.
“Today, Syriza is not a left-wing party,” said Mr. Kouroumplis, the health minister. “It is, first of all, a patriotic party, which believes in peace, democracy and social justice. We demand the right to live in dignity.”
Of Greece’s creditors, he added: “They should know that they are dealing with proud people.”