The man who cost Greece billions

ATHENS, Greece (Reuters) — Once again Alexis Tsipras was struggling to make a decision. For hours on July 13, the Greek prime minister and Europe’s leaders had been trying to thresh out a new deal to bail out bankrupt Greece and keep the country in the euro zone.

Now a clean copy of the latest text had been printed, and German Chancellor Angela Merkel, French President Francois Hollande, and European Council President Donald Tusk were satisfied with the terms. So too appeared Tsipras – but he left the room to check the details one more time with colleagues in his leftist party Syriza.

Nearly an hour later he had still not returned. Heads of government and state paced around, fiddling with their phones. The Lithuanian president and Slovenian prime minister said they could wait no longer and left through a backdoor, a diplomat involved in the summit said.

When Tsipras finally reappeared, his response confirmed what Europe’s leaders had suspected for some time: without the full backing of his party, the Greek leader could not commit. The drafting process had to begin anew.

The setback reinforced European doubts that Tsipras could control his party. Friends and associates say the 40-year-old’s calm demeanor belies a man struggling to balance Syriza, Greece’s economic interests, and his own leftist ideology. At many points he has turned to a small team of advisers, conferring with them again and again before making major decisions.

Tsipras’s strategy going into the bailout talks was to push international partners to the edge, betting they would make concessions to prevent Greece crashing out of the euro zone. In the event, though, he was forced to blink first and then ad-lib his way through the crisis that ensued.

He found himself pressed on one side by the Germans, who didn’t want to give another penny to prop up Greece, and on the other by his own political party, which opposed the austerity demanded in return for a bailout.

The indecision and delays have cost Greece about 30 billion euros in the last three weeks alone, according to one senior European Union (EU) official. Tsipras’ inability to cut a deal in early July, which forced Greek banks to close their doors and sent the economy plunging, has pushed up the cost of the latest bailout to 86 billion euros, from the 53 billion euros Greece was requesting only a few weeks ago.

Tsipras would not speak to Reuters for this story. But he told Greek state broadcaster ERT on July 15 that he had made mistakes and some bad decisions. But at least he was a straight talker, he said. “You can accuse me of many things, that I had illusions that this Europe can be defeated, that the power of what’s right can defeat the power of banks and money. But you cannot accuse me of lying to the Greek people.”

A former Syriza colleague who has known Tsipras since he was a teenager and is now with another party said: “He has grown in leaps politically, but his decisions are a result of his fears. Fear that he will be the prime minister who led Greece out of the euro, fear his party will split, and also fear he is betraying the ideology he has fought for and believed in since he was a child.”

Born in 1974 a few days after Greece’s return to democracy following seven years of military dictatorship, Tsipras joined the youth branch of the Communist Party when he was just 14. Three years later he moved to a more liberal-minded splinter group that would later be renamed Syriza.

Until a renovation a few months ago, a portrait of Che Guevara hung outside Tsipras’ office in Syriza headquarters in Athens. “At 16, I read Marx and believed capitalism would end and we would go to the next stage of society, which is socialism. To me, this was absolute,” he said in a 2008 interview with student paper Schooligans. “I was wrong. Now I know it’s not absolute. It may happen, but it may not.”

Tsipras rose through Syriza’s ranks swiftly. As head of the party’s youth wing he “was a good manager of daily issues but didn’t give the impression he would be a great leader,” said an older Syriza member who has known Tsipras since he was a teenager.

Nevertheless, party president Alekos Alavanos picked him as a candidate in the 2006 race to be mayor of Athens. With youth and sincerity on his side, Tsipras unexpectedly received 10.5 percent of the vote – not enough to win, but a massive gain for what was still a tiny party.

“Alavanos catapulted him to the top. He really fought with others in the party to establish him because he believed Alexis was the only hope for the (Left) Coalition,” said the former Syriza member, referring to a forerunner of the party.

At 33, Tsipras was president of the party, the youngest political leader in the history of modern Greece. By 40, with no experience of national government, he was prime minister, elected on the promise of ending austerity but keeping Greece in the euro zone.

Even his mentor did not think the promise stacked up. Alavanos, now 65, left Syriza years ago and heads a small party that advocates Greece’s exit from the euro zone. He has never publicly discussed Tsipras and refused to comment on their relationship for this story. But he did criticize the idea that Greece can stay in the euro and not implement austerity. “Basic intelligence dictates this is impossible,” Alavanos said.

Like the prime minister, Tsipras’ team of close advisers had little experience of government or international politics. In large part, members of his inner circle are trusted friends of a similar ideology and age.

His closest confidant is Minister of State Nikos Pappas, two years his junior. Pappas, an economist, was living in Scotland with no plans to return to Greece when Tsipras asked him to join him in 2008.

Tsipras also brought in Britishtrained economist Yanis Varoufakis, who had been an academic in Britain, Australia and the United States. He offered a way to build bridges with Europe and the United States. “(Tsipras) took him in because he broke some barriers for us,” said a Syriza insider. “He was recognizable and he had international connections.”

But Varoufakis was also radical and outspoken. Appointed finance minister after Syriza won power in January, he proved to be less bridge builder and more destroyer as he negotiated with international lenders. He angered many in Europe with his blunt rhetoric and unorthodox ideas. Even Tsipras was shocked to hear about a Varoufakis’ plan to recruit average Greeks and tourists to act as tax inspectors, insiders said.

As negotiations floundered, these two key figures in the Greek government went in different directions. Varoufakis, who would not speak for this story, eventually quit, saying he felt Tsipras was ready to reach a deal with Greece’s creditors at any price.

In all the turmoil, Tsipras also had two confidants of a different nature. One was Minister of State Alekos Flambouraris, who had worked with Tsipras’ late father in the construction industry. People close to Tsipras say the 73-yearold Flambouraris offers emotional support as his leader tries to balance party, country and principles.

Tsipras’ other support was his partner Betty Batziana, his high school sweetheart. At home they still lead a quiet and modest life, little changed from before he became prime minister.

Batziana has studiously stayed out of the limelight. In one of her few contacts with the media during a trip to Moscow, reporters asked whether it was true, as some British media suggested, that she had said she would leave Tsipras if he agreed to a bad deal for Greece. In reply, she laughed.

Tsipras’ inner team started to discuss the idea of a referendum in April, as it became increasingly clear Greece’s creditors would not budge on their austerity demands. Their aim was to use a vote on the EU’s bailout terms as a way to entrench the prime minister as the dominant political figure in Greece, rally public support around him and give him leverage with lenders, insiders say.

While popular support was important, this overlooked two important factors. First, Greece’s only real bargaining chip with its lenders was the threat of the chaos that might ensue if it had to leave the euro zone. Second, Tsipras was struggling to keep Syriza – a motley bunch of 16 groups, ranging from Maoists to environmentalists – united.

Some far-left members wanted Greece to leave the euro zone and go back to the drachma. “In the last few weeks, Tsipras had to keep a balance between keeping Greece in the euro and holding his own party together,” a former senior Syriza official said.