Newsmakers

Greece's FinMin must turn on charm for EU

(Agencies)
Updated: 2011-06-23 15:41

Demonstrators raise their arms during a protest rally against a new austerity package in front of the parliament in Athens June 21, 2011. Greek Prime Minister George Papandreou's cabinet survived a confidence vote late on Tuesday , and it must rapidly pass two more tests to avert the euro zone's first sovereign default.[Photo/Agencies]

ATHENS - Greek Finance Minister Evangelos Venizelos, a political battering ram picked to turn around his country's economic fortunes, may find the force of his oratory not enough to convince sceptical markets and EU partners.

A law professor turned politician, Venizelos, 54, is legendary for his public speaking and sharp intellect, which will prove key tools in his new job -- avoiding default by imposing tough austerity and reform measures on an angry public.

"He is probably one of the most articulate Greeks since the time of Demosthenes," said Theodore Couloumbis, of the ELIAMEP think-tank, referring to the ancient Greek statesman and orator.

"If he gets the process moving and makes things easier for the government, he will clearly step forward as the future leader of the party," he said.

But, like Britain's former Deputy Prime Minister John Prescott, Venizelos also has a reputation as a short-tempered bruiser and has had to work on his charm since losing a party leadership battle to Prime Minister George Papandreou in 2007.

In a famous incident that analysts say may have cost him that race, he turned angrily on an opponent who hurled a cup of coffee at him before TV cameras outside party headquarters.

"He has since cultivated a much more mild profile," said Paris Karvounopoulos, a reporter for Antenna TV who covered Venizelos at the Defence Ministry. "He has tried to control that arrogance...and now he believes he has a second chance."

TOUGH ODDS

The odds are stacked high against him: he is not an economist and must race against time with a new team of people to catch up on targets missed by his mild-mannered predecessor, George Papaconstantinou, who had little political experience.

In his first speech in parliament on Tuesday, Venizelos pledged to redouble efforts to get Greece back on track while making it clear he was thinking of the average Greek, addressing a wave of street protests that have rattled markets.

"Citizens are embittered, their agony and insecurity are widespread," he said. "But look, there is hope. It's up to all of us to raise our heads above the water and breathe."

Investors have been encouraged by his vigour but remain concerned his style may not travel well outside Greece. EU partners are reluctant to give fresh cash to a country that has not met its obligations and where corruption and accounting scandals have helped discredit the ruling political class.

"His predecessor was a good technocrat but had no communication skills. Venizelos shows he is active, he put up a good show in parliament last night but the big question is how he will do abroad," said a senior Greek banker who requested anonymity.

Venizelos himself admits his first eurogroup meeting was traumatic, saying he wished opposition parties could have sat with him through the 10-hour bashing by EU officials.

"The climate I found at the Eurogroup and Ecofin was one of mistrust not only for our political system but the whole country," he said.

EU diplomats said the meeting turned into an acrimonious shouting match lasting until 2 a.m. His European colleagues were unimpressed by his style and thought he didn't listen enough.

POISONED CHALICE

European Council President Herman Van Rompuy (R) and Greece's Prime Minister George Papandreou (L) talk to the media after a meeting at the EU Council in Brussels June 20, 2011.[Photo/Agencies]

Papandreou handed his old rival the poisoned chalice of the Finance Ministry after he failed to convince his adviser and former ECB vice president Lucas Papademos to take the job. Sources said fruitless negotiations with Papademos lasted till 3 a.m. before the posting went to Venizelos.

The veteran socialist, who has held several ministerial posts, agreed on the condition he was also named deputy premier so that he has power over other ministries, a role he also adopted as the organiser of the 2004 Athens Olympics.

As Culture Minister then, he pulled off an 11th-hour miracle, putting on a successful Games despite universal predictions to the contrary by cracking the whip over six different ministries.

"When he became Defence Minister he impressed military officers with how fast he understood complicated issues. But once he felt in control of an issue, he wanted to handle it all by himself, we didn't have the sense he had a team," Karvounopoulos said.

Analysts say the appointment was smart for both party rivals -- Venizelos emerges as the clear number two in the party and if he fails, Papandreou gets rid of his main contender.

With more and more socialist MPs joining the ranks of the disaffected, Venizelos' new responsibility for fiscal policy will silence many party critics and ease the difficult austerity and privatisation policies needed to secure more aid and keep Greece afloat.

Difficult privatisations, bound to prompt heated union protests, and reforming a chronically inefficient tax system to boost anaemic revenues will be top priorities.

"The appointment was clearly political and designed to prevent a split in Papandreou's party," Couloumbis said. "He gave Venizelos the 'electric chair' but in effect told him you are my number two in this government."