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This Greek hero slays monsters of the fiscal variety

Yiannis Boutaris is an unlikely mayor – a chemist by training, a winemaker by profession.

Nikolas Giakoumidis/The Globe and Mail

He is a craggy-faced, chain-smoking septuagenarian, decorated in tattoos and gold jewellery, and was once a member of the local Communist party. He is also emerging from the clutter of his own life to become the potential saviour of Thessaloniki, Greece's second-biggest city and one of the few with a balanced budget.

If he succeeds, Greece will be able to claim that at least one of its cities has bucked the economic spiral that has spread misery throughout the country since the debt crisis began in 2009. The crisis has spurred massive bailouts and cast doubt on the future of the 17-nation European currency union. It also exposed deep flaws in Greece's political culture: The story of how it accumulated some $400-billion (U.S.) in public debt is a tale of widespread tax evasion, fiscal profligacy, corruption and poor governance.

But Yiannis Boutaris, 71, is cut from a different cloth.

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He has been Thessaloniki's mayor since January, 2011, after winning the election by a mere 300 votes.

But his popularity is rising, partly because of the key role he has played as a corruption fighter.

He ended the career of his predecessor, Vasilis Papageorgopoulos, who was sent to prison in Greece's biggest corruption case. Mr. Papageorgopoulos was sentenced on Feb. 27 to life imprisonment – a term usually reserved for murderers – for his role in embezzling almost €18-million ($23-million) in city funds, though tens of millions more are unaccounted for.

When he was in opposition during the waning years of the Papageorgopoulos administration, Mr. Boutaris always suspected that the conservative mayor was looting the joint. In spite of his aging surfer-bum-cum-Buddhist appearance, Mr. Boutaris knows a thing or two about finance because he and his family run one of Greece's biggest wineries, Kir Yianni SA. The municipal accounts did not add up, and he called for prosecutors to launch an investigation.

His instincts were right. Bags full of cash had been leaving the mayor's office with alarming regularity, the court heard. When Mr. Boutaris took over the office, his team quickly figured out how Mr. Papageorgopoulos probably got away with the theft.

"The only way you can steal money is if others don't have a clear idea of what is happening, and this is deliberately done," he says. "When we came [into office], some of the records were on computers, some in handwriting. There were more than 10 centres for recording money coming in and going out, and this was really tough for us."

The first thing he did was centralize the computer systems to get an accurate picture of income and expenses.

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That turned out to be the easiest obstacle to overcome. Mr. Boutaris then turned his attention to a much bigger challenge: fixing the moribund Thessaloniki economy, where the jobless rate – 30 per cent – was well above the national average, and essential services were massively underfunded. "We had to help the city get some economic movement," he says.

Mr. Boutaris, who has relatives in Toronto, and who lost his wife to cancer in 2007 , is one of Europe's most unlikely mayors. He is a chemist by training, a winemaker by profession. and a wildlife protector by instinct. Time magazine named him a "2003 European hero" for his work to save the dwindling European brown bear population.

The roots of his family's wine tradition go back to 1879, and the modern company was formed in 1996. , when he hived off the premium wine-making division. Today, the Kir Yianni winery produces about 550,000 bottles a year from vineyards in Greece's northwest and exports to more than a dozen countries, including Canada. Mr. Boutaris cannot drink the wine because he is an alcoholic; he gets his taste hit by swirling the wine in his mouth and spitting it out.

He was president of the winery until 2010 (his two sons now run the show) and left when he won the 2010 election, inheriting an economic mess in Thessaloniki. The Aegean port city of about a million people, had been one of the jewels of the Ottoman empire. It suffered greatly under the Germany occupation in the Second World War, when most of its 50,000 Jews were deported to concentration camps in Poland. After the war, it lost its cosmopolitan flair and industrial base. In recent years, with the austerity-induced recession, the local tire, car parts and steel factories died. The Coca-Cola plant closed last year.

Mr. Boutaris embarked on a cultural offensive, designed to leverage the city's diverse Jewish, Ottoman and Turkish heritage. Thessaloniki, once known as "the Jerusalem of the Balkans," was getting almost no Israeli or Turkish tourists, though it is the birthplace of Mustafa Kemal Ataturk, the founder of modern Turkey. Going after Turkish tourists was considered radical, given the wars and animosity between the two countries.

The mayor became the city's travelling salesman. He visited Istanbul, Ankara and Israeli cities to give speeches and invited travel journalists to Thessaloniki. Ataturk's house and Ottoman buildings were restored.

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"We welcomed Turks to come to their fatherland," he says. "I get a lot of criticism for this. Nobody denies the killings [in the Greco-Turkish wars]. But we cannot live with hatred. We have to live together."

Last year, 50,000 Turks and a similar number of Israelis visited the city, up from almost none in 2009.

Freedom Square by the port, where the Jews were gathered before being sent to the concentration camps, is being recast as a Holocaust memorial and the Jewish Museum of Thessaloniki is being enlarged. The Gay Pride festival was promoted, which earned the mayor a lawsuit from the youth organization of the Greek Orthodox church.

Tourism alone won't fix Thessaloniki. The budget had to be balanced and that meant taking a cleaver to expenses and collecting unpaid taxes. Some taxes had not been paid for 15 years, though the previous mayor had recorded them as income. "We found about a million tax invoices that were not sent because of the elections," he says, noting that the previous administrations no doubt equated tax notices with lost votes.

To save money, solar panels were installed on schools to bring down electricity costs. The goal is reduce the city's energy bill to almost zero, from about €5-million a year, within three years. The public-works bill was slashed, though no municipal employees have been fired. The city applied for €100-million in European Union program funds, which are trickling in.

To be sure, Thessaloniki still has enormous problems. The streets are dirty because garbage collection is a mess. Traffic is a nightmare. The fine Museum of Byzantine Culture is running on shortened hours and a skeleton staff because of budget cutbacks.

"He could do a lot more to clean up the city," says Nenia Adamidou, a local shipping lawyer. "But he is creative and is opening up Thessaloniki to the world."

Mr. Boutaris says the job is gruelling but thinks he will run for mayor again, out of a sense of civic duty. "I always felt I was a commoner, that you are not alone in this world, that you live in society and have to participate in society," he says.

He just wants to live in one that's a bit more solvent.

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More


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