TIME Greece

Meet Greece’s New Finance Minister Touring Europe’s Ministries in a Leather Jacket

Greece's finance minister Yanis Varoufakis leaves Number 11 Downing Street after meeting Chancellor of the Exchequer George Osborne on Feb. 2, 2015 in London.
Chris Jackson—Getty Images From left: Greece's finance minister Yanis Varoufakis leaves Number 11 Downing Street after meeting Chancellor of the Exchequer George Osborne on Feb. 2, 2015 in London.

Yanis Varoufakis is trying to gather support for his plan to reduce Greek debt repayments

“George Osborne chats to random clubber on the street after a night out. Oh no wait, it’s the Greek finance minister.” It was one of the cleverer tweets to issue from the visit to London on Monday of Yanis Varoufakis, the man who was last week appointed to one of the toughest jobs in the world. In the accompanying photograph, the two men pose in front of 11 Downing Street — Osborne in a dark suit and tie, his Greek counterpart in a leather jacket over an untucked bright blue shirt, trousers and boots.

As Minister of Finance in Greece’s radical new coalition, Varoufakis was bound to attract attention. After all, the new government, made up of the of the hard-left Syriza party, which nearly won an outright majority in the January 25th election, and the right-wing nationalist Independent Greeks, has made it clear it has no interest in completing the stabilization program overseen by the troika (the European Commission, the European Central Bank and the IMF). Instead, it is keen to renegotiate the conditions of its bailout, in the direction of greater debt relief, less austerity and a repeal of what it deems destructive neoliberal reforms. Germany, the main author of the spirit of that programme, is in no mood for such a negotiation especially if it means losses for German taxpayers.

So Varoufakis, who is touring European capitals this week to drum up support for Greece’s quest for a new deal, has his work cut out for him. But despite the size of the challenge and his lack of policy or executive experience, not to mention his infelicitous debut alongside Eurogroup head and Dutch Finance minister Jeroen Dijsselbloem in Athens last Friday, the 53-year old economist seems undaunted.

He has also shown himself unwilling to alter his idiosyncratic ways to conform to what the world has come to expect of finance ministers. His casual style, as much as the substance of his proposals, has led to an explosion of media interest in his person, which he seems to revel in. He attracts passionate support and intense dislike in equal measure. The cause can be trifling — the fact that he deviates from traditional spelling to spell his first name with one “n”, for example — or serious, like when he was fired from his job on Australian public radio for what was deemed excessively strident criticism of Israel.

The man in charge of ending Greece’s Depression has spent most of his academic life in Australia (he holds dual Hellenic-Australian citizenship) and the UK, before returning to Greece to teach at the University of Athens in 2000. During the last few years, he became widely known in Greece and acquired a measure of international fame for his analyses of the causes of the euro crisis, in books and TV appearances.

In 2013, he took up a teaching post at the University of Texas in Austin. A year earlier, he had become the in-house economist of the Valve corporation, a Seattle-based video game development company. Yet in this period, as Greece kept struggling and the star of Alexis Tsipras, leader of Syriza, started rising, Varoufakis remained deeply involved in the policy discussion about the future of the Eurozone. His “Modest Proposal” for the solution of the euro crisis, co-written with professor and former MP of the U.K. Labour Party Stuart Holland (and also, in its later incarnation, with James K. Galbraith), argues that it consists of four “sub-crises” – of the banking sector, public debt, under-investment and social dislocation. It is a much more nuanced interpretation of what has gone wrong than the German-led account, which heaps all the blame on uncompetitive, spendthrift debtor nations.

His emphasis on the role of banks and on the self-defeating nature of harsh austerity, the lynchpin of the bailout programmes imposed on Greece by its official creditors, made him Tsipras’ favourite economist. There was talk of him being a candidate with Syriza in the European elections last May. It didn’t happen then, but when snap elections were called on December 29, he took the plunge, and emerged triumphant: he got 135,638 votes, by far the most out of any candidate in the country. The way was now open for the Finance Ministry, and his biggest audience yet.

This is where the tricky part begins, of course. No longer a commentator — a part he has difficulty letting go of —, Varoufakis must now craft the mother of all compromises. He must assuage Europe’s fears that the new government plans to unilaterally go back to the bad old ways of the pre-crisis period, while staying true to the democratic mandate to end austerity. His knowledge of game theory should stand him in good stead in the coming negotiation. Above all, he should recall that in the event of a non-cooperative outcome, the losses for his side will be much greater, and that, therefore, he has to avoid it at all costs.

Yannis Palaiologos is the author of “The Thirteenth Labour of Hercules”

Read next: France Offers Support for Greece Amid Bailout Tensions

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TIME Greece

Tech Start-Ups Bloom in Recession-Hit Greece

The Greek economy is reeling from six years of recession, with youth unemployment around 60 percent, but a new wave of startups could be just the thing to turn the economy around

A year ago, when Greek start-up Workable had secured their initial funding deal, the company’s headquarters consisted of six guys – including the two founders, Nikos Moraitakis and Spyros Magiatis – in three barely furnished rooms. These days, 16 of Workable’s 18 employees fill a grander, yet still conspicuously relaxed office space on two floors in the plush Athenian district of Psychico. The new office has lofty views, an abundance of couches and beanbags. People walk around in flip-flops or bare feet. The company, which offers business clients user-friendly software to facilitate the hiring process, recently opened satellite offices in London and Portland, Oregon, and has just announced a $1.5 million funding round led by the venture capital fund Greylock IL.

For a Greek economy reeling from six years of recession, start-ups like Workable may offer hope for the future. The prospects of employment in government or with an established company have become less appealing and less likely for the droves of well-educated IT engineers produced by Greece’s universities. Unemployment in Greece stands at 27.5 percent, and youth unemployment has hovered around 60 percent for months. The country’s start-up sector is small, far too small to make a dent in the staggering joblessness numbers, but it is growing rapidly.

The turning point was the creation of four EU-backed venture capital funds in December 2012 that specifically target technology start-ups in Greece. Workable’s initial funding round came largely from one of these, JEREMIE-Openfund II, which has 11 million euros under management (70 percent from the EU), and which has already funded eight Greek start-ups in as many months. Aristos Doxiadis, an economist and a general partner at the fund, said its initial target was to invest in 25-30 companies by the end of 2015, which he feared might prove too ambitious, but is now well on track to being met. The three other funds are larger, managing between 17 and 30 million euros. The evolution has not been without its growing pains – among them a dearth of experienced investors – but in the past year, start-up growth has outpaced expectations.

Now, the highest-flying among Greece’s start-ups are already spreading beyond the local scene, led by deals like Workable’s funding round from Greylock. “It is certainly a boost for the local start-up ecosystem,” says Moraitakis, Workable’s 36-year old CEO, who has a degree in Software Engineering from Imperial College in London. Along with co-founder Magiatis, he previously worked at Upstream, a Greek mobile marketing company that serves operators in more than 40 markets.

The Greylock deal is the latest in a series of international successes for Greek start-ups. Last September, US-based software Company Splunk acquired Bug Sense, a mobile app analytics company. Taxibeat, a digital taxi-hailing application, secured $4 million in funding led by the European fund Hummingbird Ventures. “It’s not that big investors will suddenly put money in other Greek tech companies just because they come from the same place we do,” Moraitakis explains. “But it will help open doors for them.”

In fact, the deal already seems to have had a ripple effect. “After it was made public, a number of big players on the European venture capital circuit began asking us what other promising companies we can tell them about,” says Doxiadis of Openfund II, which also contributed to Workable’s current round of funding. Greylock IL, an affiliate of Silicon Valley-based Greylock Partners – one of the biggest venture capital firms in the world with over $2 billion under management, and among the most discerning investors in the new digital economy – has backed companies such as Facebook, LinkedIn and Dropbox. Its portfolio consists of 30 Israeli firms and only 9 European companies, including Workable.

Workable was founded in June 2012, a few days before the critical, repeat parliamentary elections in Greece that many thought would lead to its exit from the euro. Moraitakis came home to Athens from Dubai, where we has working for Upstream, just as the election campaign for the initial May poll was getting under way. His friends thought he was crazy. These days, having bucked the emigration trend, he is busy trying to engineer what he calls a “reverse brain drain” – bringing other talented Greeks back to Athens.

The first meeting between Workable’s founders and Greylock took place in November 2012 in London, when the company was still at a very early stage of development. The fund kept its eye on Workable’s product development, in particular its suitability for small and medium-sized firms that do not have dedicated HR departments. They saw the high rates of growth: in early 2014, the month-on-month increase in clients has reached 30%. That performance prompted investment despite Greece’s less than stellar reputation as a place to do business.

Greece’s economy is still very troubled; however, the ingredients are there for a startup that may turn out to be a world beater, and venture capitalists are taking notice. “We feel there are benefits to Greece,” says Tilly Kalisky, associate partner at Greylock IL. “There is qualified engineering talent at competitive costs compared to European and US equivalents. We feel that excellent entrepreneurs and companies can be created from anywhere.”

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