George Osborne’s appeal to Greece: Act responsibly

Essex-educated Finance Minister Yanis Varoufakis back in Britain for summit with Chancellor

George Osborne with the Greek Finance Minister, Yanis Varoufakis, outside 11 Downing Street on Monday (Reuters) (Reuters)

The struggle between Greece and the eurozone is fast becoming the biggest risk to the global economy, George Osborne has warned.

The Chancellor was speaking after talks in Downing Street with Yanis Varoufakis, the Greek Finance Minister who is lobbying EU member states as the new Syriza government seeks to renegotiate the terms of his country’s £179bn international bailout.

Mr Osborne appealed to Mr Varoufakis to act “responsibly” and not to trigger a new financial crisis in Europe that would harm Britain’s economic recovery.

“It’s clear that the stand-off between Greece and the eurozone is fast becoming the biggest risk to the global economy, and it’s a rising threat to our economy at home,” he said. “In Europe, as in Britain, now is the time to choose competence over chaos.”

The Greek Finance Minister, an economics professor and blogger who studied at Essex University, wore a blue, open-necked shirt, while Mr Osborne opted for a traditional suit, collar and tie.

Despite their political and sartorial differences, the Greek minister seemed to enjoy his meeting with Mr Osborne.

“It was a breath of fresh air actually,” Mr Varoufakis said afterwards. “My feeling leaving 11 Downing Street was that we have a very constructive relationship. We had a wonderful meeting and despite our differences we’re highly tuned to finding common ground.”

Mr Varoufakis added: “[We have] a determination to put an end to the extended pretence cycle which has rendered Greece a festering wound on the side of the eurozone, which even for Britain, which is not a member of the eurozone, is a great concern because the deflationary crisis in Europe certainly doesn’t augur well for the British economy.”

There was another boost for the new Greek government yesterday, as it emerged that the dreaded Troika –which has come to symbolise unelected institutions wielding the power to cut jobs and slash social spending – could soon be a thing of the past.

Since the advent of the eurozone crisis, bailouts have been disbursed by the European Central Bank, International Monetary Fund and European Commission – collectively known as the Troika – with austerity demands attached. As ordinary people in bailout countries like Greece see unemployment soar and living standards fall, the Troika has become a target for rage.

Now, European Commission officials have hinted that they may be willing to scrap the Troika in its current format. A report in the German business newspaper Handelsblatt yesterday quoted an unnamed Commission official saying that they “have to find an alternative quickly”, and that EC President Jean-Claude Juncker was behind the plan.

Asked about the claim yesterday, Commission spokesman Margaritis Schinas did not deny it, and referred to a political platform Mr Juncker had penned before his appointment in which he wrote that “in the future, we should be able to replace the Troika with a more democratically legitimate and more accountable structure”.

However, Mr Schinas said no such plans were immediately on the table, and said a meeting tomorrow between Mr Juncker and the new Greek Prime Minister, Alexis Tsipras, would be the first step in any debt negotiations.

Yanis Varoufakis, left, is lobbying EU member states as the new Syriza government seeks to renegotiate the terms of his country’s £179bn international bailout (PA)

Mr Tsipras has made clear that his government will not negotiate with the Troika, despite a final tranche of €7.2bn in bailout cash awaiting approval. But while his ministers may be on a charm offensive across Europe to win support for the renegotiation of their debt, resistance remains strong in Germany.

Profile: George Osborne

Age: 43

From a good family? Son and heir to Sir Peter George Osborne, 17th Baronet, of Ballentaylor, in County Tipperary, and Ballylemon, in County Waterford. Has a stake in the multimillion-pound family wallpaper business, Osborne & Little. Married to Frances Victoria Howell, eldest daughter of Lord Howell of Guildford, the former Conservative minister.

Style: Sensible suit and tie. Did once dress up in penguin suit, bow tie and waistcoat, but he doesn’t like to talk about the Bullingdon Club now. Attracts descriptions such as “pink and facetious” (Labour MP Chris Mullin); “high-pitched vocal delivery” (leaked US WikiLeaks cables) and “chinless” (people on Twitter).

Education: Norland Place School (where fees are now £4,000-plus a term); Colet Court Prep School (£5,800 a term), St Paul’s public school (£7,264 to £10,880 per term). But when he got to Magdalen College, Oxford, his Bullingdon chums reportedly nicknamed him “oik” (because he hadn’t been to Eton or Harrow). Recovered sufficiently to get a 2:1 in modern history.

Economic philosophy: “We’ve got to make more cuts – £17bn this coming year, £20bn next year, and over £25bn further across the two years after. That’s more than £60bn in total.” (January 2014)

A fan of Maggie, is he? Cried at her funeral. Wrote in The Times: “Sometimes that sense of historical greatness risks being overpowering for the two generations of politicians who have come after her, including my own.” What about Angela? Said in November that the EU was “not working for Britain”. Dismissed as “speculation” reports that Angela Merkel would rather see the UK leave the EU than change the immigration and freedom of movement rules that the Conservative government wants to renegogiate.

Famous for saying: “The plan is working. It’s a serious plan for a grown-up country.” (December 2013). “Mr Speaker, our long term economic plan is working.” (December 2014). “In Britain we have got an economic plan that is working.” (January 2015, after the victory of Mr Varoufakis and his Syriza friends led some to question austerity.)

Any problems? That stuff he keeps says about the plan working. Not everyone believes him. And there’s an election coming up.

Profile: Yanis Varoufakis

Age: 53.

From a good family? Not by George’s standards. Has been described as “the first economics minister in years not to hail from one of the dozen political dynasties that usually rule Greece and its ministries”. But his wife, Danae Stratou, an artist, is fairly well-connected. Her dad, Phaedon, is the son of Stamoulis Stratos, who co-founded the Peiraiki-Patraiki group, once Greece’s largest textile manufacturer.

Style: Tight shirts, shaven head, motorcycle boots. No tie, not even for meeting George yesterday. Back in Greece, travels to meetings on his 1,300cc Yamaha motorbike. Attracts descriptions such as “the coolest politician” and “square-jawed”. Mobbed by camera-wielding schoolgirls on his first day at the finance ministry.

Education: Economics at the University of Essex, to begin with. (His parents wanted him to go to England because they feared the return of a military dictatorship in Greece.) Once at Essex, switched to mathematics because “within weeks I was aghast at the inane musings of my lecturers. Worse still, the mathematics utilised were third rate and, consequently, the economic thinking that emanated from it was atrocious.”

Economic philosophy: “An Erratic Marxist in the Midst of a Repugnant European Crisis.” (That’s the title of one of his academic papers.) Has called the European Union “a fundamentally anti-democratic, irrational cartel that has put Europe’s peoples on a path to misanthropy, conflict and permanent recession”.

A fan of Maggie, is he? Fled the UK after Margaret Thatcher’s third election victory in 1987 because “it was too much to bear”. Found refuge in a lectureship in Sydney, Australia – until “abhorrence of the [right-wing] government of that awful little man John Howard” pushed him back to Greece.

What about Angela? He wants a huge reduction in Greece’s debt. Angela Merkel has just said she’s not going to give him “a further debt haircut”.

Famous for saying: That Greece’s international bailout deal was “a toxic mistake” and that the austerity regime imposed on Greece was a “kind of fiscal waterboarding policies that have turned Greece into a debt colony”.

Any problems? Debt totalling €315bn, three million Greeks living on or below the poverty line, mass unemployment. Apart from that, not much, really.

Adam Lusher