If Greece exits its third bailout in August as planned, Finance Minister Euclid Tsakalotos will deserve much of the credit. Not that many Greeks are likely to thank him. “You won’t see many happy faces in Athens,” says political analyst Yannis Koutsomitis. That’s because the reforms Tsakalotos and his boss, Prime Minister Alexis Tsipras, have implemented took a deep toll on Greek society. The government has slashed pensions, raised taxes and pared down the public sector. More than 20 percent of the population is out of work.
“When push came to shove, he was able to push aside his ideological preconceptions,” said Yannis Palaiologos, a Greek journalist and author who has written extensively about the crisis. “He’s not someone who will put politics above the interests of the country.”
When Tsakalotos took up his post in the summer of 2015, few expected big things. Yanis Varoufakis, his contumelious predecessor, had taken Greece to the brink of financial Armageddon, antagonizing Athens’ creditors with a devil-may-care attitude toward its bailout obligations. Europe had little confidence that Tsakalotos, another tie-less economist with leftist views, would be much different. Fed up with Athens’ antics, Germany quietly hatched a plan to give Greece a “time out” from the eurozone, an outcome that would have almost certainly resulted in a permanent “Grexit.”
Tsakalotos, Greece’s eighth finance minister in just four years, was given the thankless task of keeping his country in. Just a month after taking office, he surprised many by clinching a deal for a third bailout totaling €86 billion. His secret: convincing his Eurogroup colleagues that despite his communist past, he wasn’t interested in being another populist poster boy.
It wasn’t the first time Tsakalotos, 57, confounded expectations. He is the scion of a prominent Greek family that played an important role during the country’s civil war. A cousin, Thrasyvoulos Tsakalotos, was one of the generals that led government forces to victory against the communists in 1949. Instead of embracing that legacy, Tsakalotos rejected it, convinced the wrong side had won.
Euclid Tsakalotos, left, chats with European Commissioner Pierre Moscovici, center, and Eurogroup President Jeroen Dijsselbloem before a Eurogroup meeting of finance ministers | Stephanie Lecocq/EPA
What makes Tsakalotos’ political evolution even more surprising is that he is a product of one of the most entitled circles in the world — the British establishment. The son of a Greek engineer who worked in the shipping industry, Tsakalotos left Greece at age five for the U.K. and was educated at an English public school and at Oxford. In the early 1990s, he returned to Greece to work as an academic and soon became involved in leftist politics. His sometimes fiery parliamentary speeches, delivered in English-accented Greek, have become a guilty pleasure for watchers of Greek politics.
Though his privileged background has earned Tsakalotos an eccentric reputation in Greece, his high-born manners might explain how he won over his European colleagues. Even Germany’s famously cantankerous finance minister, Wolfgang Schäuble, warmed to his Greek counterpart, recently describing Tsakalotos as an “excellent finance minister” and masterful negotiator.
Greece may be responsible for many of its problems, he argues, but the forces that drove it to the brink are deeply rooted in the EU.
That’s not an endorsement Tsakalotos will likely want to take to the ballot box. Syriza, the leftist movement that Tsipras and Tsakalatos rode to power in 2015, won support by promising to end the very austerity they’ve forced Greeks to endure. Many of their former supporters now feel betrayed.
That said, the next election isn’t scheduled until the fall of 2019 — a lifetime in politics. Whether Syriza can recover will depend in part on whether Tsakalatos can cash in his diplomatic credit and help convince Europe to grant Greece some kind of debt relief when its bailout ends. Greece may be responsible for many of its problems, he argues, but the forces that drove it to the brink are deeply rooted in the EU’s own architecture, a reality he says Europe has slowly woken up to.
“I believe that there is increased understanding for the social and regional inequalities which are the main reason for the crisis … as well as for the general view that the eurozone and EU do not solve the problems,” he recently told a Greek interviewer. If he can bring others around to that view — and if the economy, which has started growing again, stays on track — Tsakalotos may be around longer than anyone bet on when he took over.