Tags: EU | Greece | Financial | Crisis

Greek Finance Minister Spared In Late Reshuffle

Tuesday, 07 Sep 2010 07:09 AM

Greece's new cabinet was sworn in Tuesday after a late night reshuffle focused on battling the country's debt crisis, with Prime Minister George Papandreou retaining his finance minister but changing other key posts.

The reshuffle was Papandreou's first since he came to power after sweeping elections last October. Greece's debt crisis broke out soon after, when the newly elected Socialists revealed that the country had been fudging statistics.

The country found itself on the brink of default earlier this year and had to call on the European Union and International Monetary Fund for help. It is now receiving rescue loans from a 110 billion euro ($140.27 billion) three-year EU and IMF package, and has promised to reduce its budget deficit from 13.6 percent of gross domestic product in 2009 to 8.1 percent this year. So far, the Finance Ministry says it is slightly ahead of its targets.

Under the changes leaked on Monday evening but not officially announced until 1:40 a.m. Tuesday, Papandreou replaced his development, labor and health ministers to better tackle long-standing problems in the social security and health sectors. He gave up the foreign minister post that he had held himself, promoting his deputy to that position, but retained George Papaconstantinou in the key job of finance minister.

Papandreou's Socialist government faces regional elections in November, testing tolerance for the harsh austerity measures required to receive the rescue loans, including cutting civil servants salaries, trimming pensions and raising taxes.

Ministries related to the economy or facing major reforms are subjected to frequent inspections by budget enforcers from the European Union and International Monetary Fund.

Papandreou expanded his cabinet to 48 ministers and deputies from 37. Economy Minister Louka Katseli took over the Labor and Social Security portfolio, replacing Andreas Loverdos who moves to the Health Ministry.

Party veteran Michalis Chrysohoidis moves from the Civil Protection Ministry to take over the Regional Development and Competitiveness portfolio.

The prime minister also assigned close aide Haris Pamboukis to deal with foreign investment, and switched several junior portfolios between ministries. The changes were seen as boosting the role of the Finance Ministry's control over economic reforms.

Several other veteran party members who served in previous Socialist governments returned to the Cabinet in an apparent effort to woo traditional supporters who are less likely to back the economic austerity.

Papandreou's Socialists, still comfortably ahead of conservatives in surveys but losing overall support, slashed government payrolls and overhauled the pension system earlier this year. But they still face more difficult reforms, including dealing with loss-making state enterprises and abolishing labor protection rules to try and boost competitiveness.

The Cabinet is to hold its first full meeting in the northern city of Thessaloniki at the end of the week, where the prime minister is to give an annual speech on the state of the Greek economy over the weekend.

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Greece's new cabinet was sworn in Tuesday after a late night reshuffle focused on battling the country's debt crisis, with Prime Minister George Papandreou retaining his finance minister but changing other key posts. The reshuffle was Papandreou's first since he came to...
EU,Greece,Financial,Crisis
475
2010-09-07
 

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