By Helena Smith
Giorgos (George) Papaconstantinou is an optimist by nature – which is just as well for a Greek finance minister. Few – some might say very few – have a job as unenviable as his: fixing the weakest economy in Europe, with the highest debt in the EU, in a timeframe that might make even Hercules flinch.
From reining in the country’s ballooning budget deficit to restoring its battered creditworthiness, Papaconstantinou has his work cut out for him. Even Prime Minister George Papandreou admits that Greece “risks sinking” under its staggering €300 billion debt.
1961: Born, Athens
1980-88: London School of Economics (BSc), New York University (MA), London School of Economics (PhD)
1988-98: Senior economist with the OECD
1998-2000: Adviser to prime minister Costas Simitis
2000-02: Special secretary, Ministry of Economy and Finance
2003: Oversees Lisbon strategy during Greece’s presidency of the EU
2003-07: Teaches at Athens University of Economics; external adviser to the European Commission on research and information society issues
2004-07: Economic adviser to George Papandreou
2007: Elected to parliament
June 2009: Elected to the European Parliament
October 2009: Finance minister
He may be a little egotistical but this is a guy who is also ultra-calm, ultra-level-headed, ultra-organised and ultra-punctual. He has this ability not to show what he thinks, or feels, even when he is agitated.
On all fronts, Papaconstantinou’s is a lot that few would want. For a man who, though an economist, concedes that numbers were never really his thing, the task at hand would seem harder still.
But he does not quite see it that way, even if he keeps a small plant (on closer inspection, a mini olive tree) in a pot emblazoned with the word Elpizw – “I hope” – in his scrupulously neat Athens office. Instead, he sees his job as a “trem-endous challenge”, one that he hopes will ultimately change Greece for the better.
Papaconstantinou might not, at first sight, seem the most obvious choice to carry Greece through this crisis: this is his first cabinet post and he has spent more than half of his 48 years abroad – in London, New York and most recently Paris where, for ten years, he worked at the Organisation for Economic Co-operation and Development (OECD).
Nor has he had an easy time in the hurly-burly of Greek politics, despite his relatively privileged background (typically for a member of Greece’s jeunesse dorée, he was educated at Athens’s American Col-lege, before going on to take his first deg-ree at the London School of Economics).
In 1998, by then married to the Dutch travel writer Jacoline Vinke and with two young sons, he decided to return to Greece as an adviser to Costas Simitis, the then socialist prime minister. Politics soon beckoned and aides speak of epic efforts to secure a parliamentary seat in Kozani, a fur-trading area of northern Greece from where his civil-servant father, Nestor, hailed.
But it was a time when modernising policies were regarded with deep suspicion among the rank-and-file of the Pan-Hellenic Socialist Movement, Pasok, who repeatedly rebuffed his candidacy, rejecting his cosmopolitanism and fresh ideas in favour of apparatchiks with more traditional agendas. Papaconstantinou responded with the tenacity that, according to some of his closest colleagues, has come to distinguish his career.
“He is incredibly stubborn…even when he lost, he’d say the very same night ‘we’ll try again’. Not many people would have done that,” says Filio Lanara, a member of his private cabinet for the past six years.
“He may be a little egotistical but this is a guy who is also ultra-calm, ultra-level-headed, ultra-organised and ultra-punctual. He has this ability not to show what he thinks, or feels, even when he is agitated.”
In 2007, after three attempts, the bookish and mild-mannered Papaconstantinou was elected, thanks mostly to first-time voters.
“We should not underestimate the frustration that Greeks feel for things as they are,” he has insisted. “Deep-seated structural problems in our society have come to the surface…there is a sense that we cannot go on any longer like this.”
Papaconstantinou readily accepts that it was his time abroad that allowed him to see things differently. “Living out of Greece taught me there is a different way,” he says.
It came as no surprise that Papandreou – US-born and reform-minded – made Papaconstantinou first his senior economic adviser, then put him at the top of Pasok’s list of candidates for the European Parliament elections in June 2009, and finally appointed him finance minister. (Both are also fervent non-smokers and exercise enthusiasts.)
The party’s progressive wing is firmly in the ascendant following Papandreou’s landslide victory in elections last October, but Papaconstantinou is the first to admit the scale of the economic and political challenge.
“If you look at the numbers for 2009, they are frightening in terms of the expenditure overruns,” he says, alluding to a 2009 deficit expected to reach a record 12.7% of gross domestic product, more than four times higher than permitted in the stability and growth pact and twice as high as announced by the previous centre-right government.
For too long, he laments, successive governments have tried to hoodwink mandarins in Brussels by cooking the books. “I can tell you that it is not the easiest task for a Greek finance minister to have to defend the integrity of the country’s data.”
Restoring Greece’s credibility is, he says, as important as restoring it to fiscal health. With alarm over the state of the Greek economy also at unprecedented levels amid continuing doubts about the government’s rescue programme and fears of a debt default, he and the govern-ment know that time is not on their side.
Week after week, Brussels has piled on the pressure, ramming home the message that fixing Greece’s public finances is also crucial to the Eurozone’s stability and functioning. EU officials have reiterated that the government will have to be more specific about its three-year programme, which, in keeping with pre-election pledges to cushion the poor from further financial strain, has so far rested on expenditure cut-backs, tax hikes and a public-sector pay freeze.
For his part, Papaconstantinou appears to relish the prospect of measures to put Greece’s economic house in order. He has accepted a wage cut and quickly dispensed with his luxury Mercedes Benz, one of the job’s few perks.
Paschos Mandravelis, a columnist and a man who knows Papaconstantinou well, describes him as one of the most literate politicians in Greece. “He reads, which allows him to understand issues quickly, and works incredibly hard. Friends and colleagues will often receive emails from him at 2 or 3am.”
Many, including western European diplomats, seem impressed by his acuity and convinced of his sincerity.
But even his greatest fans acknowledge how formidable his task is.
Greece is a restive place, still reeling from riots triggered by its economic woes. From from his sixth-floor office on Syntagma Square, Papaconstantinou has a bird’s-eye view of the streets where protesters like to gather.
With powerful trade unions already girding up for battle in the face of further austerity measures, he is acutely aware that his will be a tight-rope walk, one that ultimately will depend as much on political skills as on the economic finesse and on the Apollonian optimism that nature has blessed him with.