Alexis Tsipras gives top economic posts to left-wingers

Line-up likely to raise concerns among investors fearful Athens will row back on reforms

Newly appointed Greek prime minister and winner of the Greek parliamentary elections, Alexis Tsipras, attends a swearing in ceremony by members of his cabinet at the presidential palace in Athens on January 27th, 2015. Photograph: Yannis Behrakis/Reuters

Newly appointed Greek prime minister and winner of the Greek parliamentary elections, Alexis Tsipras, attends a swearing in ceremony by members of his cabinet at the presidential palace in Athens on January 27th, 2015. Photograph: Yannis Behrakis/Reuters

 

Greece’s radical leftist prime minister Alexis Tsipras announced his cabinet on Tuesday, giving the top economic posts to a former communist politician and a popular left-wing blogger who has lambasted the austerity programme imposed by international creditors.

Mr Tsipras’s list signals his concern to field a strong economic team while satisfying demands from the far left of his party for a significant portfolio and finding a few ministerial posts for the Independent Greeks, his right-wing coalition partner.

The final line-up, dominated by left-wing academics, is likely to raise concerns among investors fearful that Athens will row back on reforms, attack big business interests and take a hard line on renegotiating Greece’s debt burden.

Observers said Mr Tsipras’s decision to shrink the cabinet from 20 to 10 ministries suggests the administration will be tightly controlled by the prime minister and his chief of staff, Nikos Pappas, who became a minister of state.

The creation of a significant portfolio, with the appointment of Panayotis Nicoloudis as minister for transparency, also sends a message that the government is preparing a crackdown against tax evasion and corruption, seen by creditors as a big obstacle to a sustained recovery.

Anti-corruption

Giannis Dragasakis, Syriza’s frontman for discussing the economy with foreign creditors, was named deputy prime minister with responsibility for overseeing negotiations with the troika of bailout monitors from the European Commission, the International Monetary Fund and European Central Bank.

The 67-year-old former member of the Greek Communist party’s central committee is the only cabinet member with experience of government, having served as deputy finance minister in a shortlived all-party government in 1989.

Yanis Varoufakis, an Athens university economics professor and former economist-in-residence for a US online gaming company, was appointed finance minister. He will oversee public spending and revenue collection and represent the government at meetings of euro zone finance ministers.

Daunting challenges lie ahead for Mr Tsipras’s inexperienced government, from convincing politicians and bureaucrats in Berlin and Brussels that Greece will not overturn fiscal and structural reforms enacted during the four-year bailout to securing an extension to the current bailout deal before it runs out on February 28th.

Mr Dagasakis and Mr Varoufakis will face their first test later this week when Jeroen Djisselbloem, chair of the Eurogroup of euro zone finance ministers, will visit Athens to discuss whether the government is ready to resume talks on a delayed progress review that could unlock €7 billion of bailout aid.

Martin Schulz, the European Parliament president, is also due to visit Athens this week for talks with Mr Tsipras.

Awkward coalition

The announcement was delayed amid frantic talks over a few deputy ministers’ jobs for Independent Greeks, while internal disagreement meant Syriza’s appointees had to be reshuffled several times. However, all but one of Mr Tsipras’s team of economic advisers joined the cabinet. – Copyright The Financial Times Limited 2015