News Analysis: Greek PM reshuffles cabinet to speed up efforts to lead Greece out of economic crisis

September 7, 2010 10:09 am 

ATHENS, Sept. 7 — A sweeping reshuffle of the Greek government was announced after midnight Monday, less than a year after the ruling socialist PASOK party came into power, in an effort to bring the deficit-ridden country out of the economic crisis.

According to local analysts and media reports, Greek Prime Minister George Papandreou seeks to strengthen through the reshuffle the effectiveness and speed of the team of his close associates which lead the national efforts for Greece's exit from a severe economic crisis which broke out in late 2009.

Local analysts pointed out immediately that the new team is bigger than the previous one, forecasting possible coordination problems. They also noted that the official announcement of the reshuffle was made by government spokesman George Petalotis with a four-hour delay, since the first rumors of an imminent cabinet shake-up started in Athens on Monday evening. The new cabinet is expected to be sworn in on Tuesday noon.

The shake-up of the cabinet follows PASOK's National Council decision on Sunday that three outgoing deputy ministers run for posts in the November local and regional elections.

But the main reason behind the reshuffle, according to Greek political analysts, is the heavy criticism the outgoing government received over the past few months for delays on the implementation of the necessary structural reforms which will breathe life to Greek economy.

Greek government spokesman George Petalotis who retains his post, announced that Greek Finance Minister George Papaconstantinou remains at the helm of the ministry. Deputy Prime Minister Theodoros Pangalos also retains his post, while outgoing Interior Minister Yannis Ragoussis is named as presidency minister responsible for the better coordination of the government

Harris Pampoukis gets the portfolio of foreign investments, which is a priority for Greece, as it struggles to slash a huge budget deficit that now stands at 13.6 percent of GDP and return to the path of development over a three-year period with the financial aid of European Union and the International Monetary Fund.

Regarding the changes in other key posts, Papandreou left the portfolio of foreign minister to outgoing Alternate Foreign Minister Dimitris Droutsas and replaced Economy, Shipping and Competitiveness Minister Louka Katseli with the current Citizen Protection Minister Michalis Chrysohoidis.

The ministry is renamed to Ministry of Regional Development and Competitiveness. Current PASOK National Council Secretary Socratis Xynidis will serve as a deputy minister responsible for northern Greece. Katseli will be the new labor and social security minister, while outgoing Labor Minister Andreas Loverdos moves to the post of Health and Social Solidarity Ministry.

Secretary of PASOK's parliamentary group Christos Papoutsis is named as new citizen protection minister, and Giannis Diamantidis as head of the new Ministry of Shipping which will be separated from the Economy Ministry and renamed as Ministry of Sea Transportation, Islands and Fishing.

Outgoing Health Minister Marilisa Xenoyannakopoulou receives the post of alternate foreign minister responsible for European affairs, while Pavlos Geroulanos remains as culture and tourism minister, Evangelos Venizelos as defense minister, Dimitris Reppas as infrastructure minister, Anna Diamantopoulou as education minister and Tina Birbili as environment protection and climate change minister and Harris Kastanidis as justice, transparency and human rights minister.

Kostas Skandalidis will be the new head of Agriculture Ministry, replacing Katerina Batzeli who is the most prominent minister to be left out of the new cabinet reshuffle. Greek media noted that the Greek premier is not expected to enjoy a new "honeymoon,"as Greek citizens strongly object to harsh austerity policies and revolutionary reforms to overcome the crisis, not only the ministers who were responsible to promote these changes.

In October 2009 socialist Papandreou was elected for first time prime minister with a parliamentary majority of 160 seats in the 300-seat parliament, pledging Greek people a better future with the reconstruction of the Greek state.

Since the Greek debt crisis broke out he led a national campaign to avoid a default. This spring Greece came close to bankruptcy, but secured a multi-billion euro aid package from EU and IMF in exchange of harsh reforms by 2014 to put the economy in order and save Europe from a domino effect.

The package of cutbacks on salaries and painful reforms such as the one on the pension system was met with strong reaction by Greek citizens who agreed with the need to change, but ask the government to fight widespread tax evasion instead of increasing the burden on low and medium income families.

As seven out of 10 Greeks appear pessimistic about the short- term future of the Greek economy and their own financial state and living standard, Athens expects the release of the second tranche of EU-IMF aid next week under pressure to speed up reforms.

A team of EU-IMF auditors who discuss with the Greek government the next steps to be taken is due to arrive in Athens also next week, as Greek labor unions step up a new wave of protests and strikes over austerity measures and increases in the numbers of unemployed. (PNA/Xinhua)



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