Hundreds of jobs were lost as one industry after another, including companies such as Coca Cola and Siemens, moved to cheaper, former communist countries nearby.
The crisis has even taken a toll on the city’s renowned night life. Seaside cafes and clubs, usually teeming with students, are half-empty. Shopping streets are dotted with barricaded shops that went out of business.
To mitigate the crisis, Boutaris has revived tourism, drawing visitors from new markets, but also the ire of Greek nationalists. Last year, foreign arrivals rose by 37 percent.
“I travel to Sofia, Belgrade, Tirana, Skopje and say: ‘Come to Thessaloniki and have a good time,’” said Boutaris, who breathed new life into his family’s abandoned mountain village of Nymfaion in the 1990s by setting up a hotel, restaurants and a wildlife reserve.
To lure tourists to Thessaloniki he staged the 12th edition of Womex, a big world music festival, and a gay pride parade, infuriating the city’s conservative clergy.
Arrivals from Turkey and Israel have soared in the past two years after he helped lure Turkish Airlines and traveled to Israel to evoke the city’s flourishing Jewish, pre-Holocaust past.
Thessaloniki was known as “Second Jerusalem” before most of the Jewish population perished in German concentration camps. Boutaris said his first girlfriend was Jewish. Kapon is proud to be the city’s first Jewish municipal counselor since 1937.
However, Boutaris’ moves to highlight the city’s Turkish Ottoman and Jewish past, as well as his outspoken stance against Greece’s ultra-right Golden Dawn party, have enraged some.
“This is a proud city. It’s unacceptable for him to say that Greeks had a good time under Ottoman rule,” said shopkeeper Ilias Drakopoulos, objecting to some of Boutaris’ proposals to give streets their old Turkish names back and raise a statue of modern Turkey’s founder, Kemal Ataturk, who was born in the city.
Boutaris’ failure to deal with the city’s garbage is providing fodder to his rivals.
“The city is drowning in it,” his conservative opponent Costas Gioulekas, 51, said. “Street lights are not being fixed, it’s the darkest city in Europe.”
Away from the main streets, garbage bins are overflowing. Stray dogs are seen chewing bones on a moldy abandoned mattress outside the Rotunda, a late Roman monument on the UNESCO World Heritage list. Parking is a nightmare, even by Greek cities’ appallingly low standards.
“He is fixing the finances and improving transparency, but this still doesn’t show in how the city looks,” said local management consultant Nikos Papadopoulos, who complained about dumped garbage bags under his balcony.
Boutaris admitted he has failed to deliver on a pre-election promise to clean up the streets in six months, saying that it was harder than he thought to move garbage workers from desk jobs out to the streets.
“It’s hard to clean up the city without having the people,” he said.
He also blamed bureaucratic snags for failing in some of his planned projects, such as bicycle paths and traffic changes to ease congestion, which must first be approved by government authorities.
“Dealing with them is like getting stuck between a rock and a hard place, but citizens, of course, blame me,” he said.