Business Irish

Saturday 7 December 2019

No-nonsense EU economist keeps firm grip on bank's purse strings

Former Yale professor is part of a new breed of officials

Thomas Molloy

VICE presidents are two-a-penny these days. It's a title so demeaned that it is almost a surprise to meet somebody other than US Vice President Joe Biden, who holds that title and real power.

Plutarchos Sakellaris is such a man. The vice president of the 52-year-old European Investment Bank holds the same rank as a European commissioner in Brussels and is second-in-command at the bank, which has more than €70bn, or close to what Ireland spends in a year, to lend for the continent's roads, energy projects and small business.

The 45-year-old economist was in Dublin this week for talks with Finance Minister Brian Lenihan and will soon decide whether his bank should lend money for various projects close to the Government's heart, such as the metro project to link Dublin airport with the city centre and a network of motorways to join Cork, Galway and Limerick.

The former Yale professor was plucked from academia by the Greek government to fine tune Greece's macro-economic policies and was appointed to the bank in August 2008, a month before the collapse of Lehman Brothers. He is one of a new breed of European officials that is likely to become more common as the crisis continues: academic, US-educated, international in outlook and straight talking. He could be a Greek version of the Central Bank's Patrick Honohan or Brian Lenihan advisor Alan Ahearne. All three are high-flying academics who have been influenced by the US and drafted in as their economies totter on the brink of ruin.

The son of a non-political theologian and primary school teacher, Mr Sakellaris says he revels in policy making after 20 years in academia. Thinking back to his time in Greek politics where he often represented his government at Ecofin meetings, Mr Sakellaris says the biggest difference is the lack of time available to think about complex questions. "In academia you are paid to think. In the Finance Ministry you are paid to advise and act. You don't have the luxury to think hard," is how he puts it.

Unlike many European officials, Mr Sakellaris appears able to retain some distance from the European project and remains alive to the failings of both his homeland and Brussels. He worries that Europe is too weak and speaks with a confusing array of voices, which leave outsiders, whether they are ordinary citizens or governments in Washington and Beijing, confused about what is going on. "Europe is not as strong in the world scene as it could and should be. Talk to Americans. They don't understand why we have to have commission president, council presidents, country presidents."

At meetings such as the G20 there are too many European countries in the room and this means they are not taken seriously, he adds in his flawless English, which has just the lightest touch of a Greek accent.

He is equally critical of education this side of the Atlantic, which is rarely up to American standards. US universities are full of Indian and Chinese students, he notes. This has helped universities there to develop schools of thought and the world's best economists.

Looking at Ireland, where small- and medium-sized businesses complain bitterly about the banks' reluctance to lend, Mr Sakellaris cautions that we are not as unusual as we think. Business everywhere is suffering from credit shortages, he notes, revealing that Irish companies have borrowed just two-thirds of the €260m set aside by the EIB for SMEs last year.

The rest of the money (which is lent via Ulster Bank, Bank of Ireland and AIB), remains available to businesses. "If, of course, there is a demand for loans and we are presented with appropriate projects, we stand ready to lend to sustainable, economically viable projects," he says.

While most of the EIB-sponsored projects are large-scale projects such as Eirgrid's east-west interconnector, the DAA'S new terminal at Dublin airport or the ESB's wind farms, Mr Sakellaris's own ambitions remain refreshingly down to earth. "The most important thing to me is to make sure I am a good husband and a good father," he confides. It's the sort of comment that reminds one that business and politics on the Continent can feel and sound rather different to here.

Irish Independent

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