By Renee Maltezou and Michele Kambas
ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras will reappoint Euclid Tsakalotos as finance minister, a senior source in his leftist Syriza party said on Tuesday, to offer continuity in bailout talks with international lenders.
Tsakalotos, a low-key Oxford-trained Marxist economist, helped steer bailout discussions with Greece's creditors that produced an 86 billion euro loan accord with Athens in August.
George Chouliarakis, who was finance minister in the caretaker government during the election campaign and also a respected member of the bailout negotiation team, was 'very likely' to be appointed deputy finance minister, the source said.
Generally considered safe pairs of hands, the appointments if confirmed will come ahead of a review by lenders starting next month on progress in meeting bailout targets, recapitalizing the country's banks and holding discussions that Greece wants on debt relief.
Tsakalotos is a stark contrast to his combative predecessor Yanis Varoufakis, who quit Tsipras's government in disagreement over the bailout in July. He frequently riled lenders with outspoken and occasionally undiplomatic remarks, including one where he said he wore 'creditors' loathing with pride'.
"The markets will see this positively," said Takis Zamanis, chief trader at Beta Securities in Athens. "It appeared the chemistry was right between Tsakalotos and lenders."
Earlier on Tuesday, state media reported Tsakalotos was having second thoughts about accepting the job.
It gave no reason, but Tsakalotos, Dutch-born and British-educated, is a member of the so called '53+' faction in Syriza, some of whose members recently expressed concerns the party was moving away from core leftist values to hold on to power.
The government's two main tasks will be to ensure that the bailout given by the euro zone in exchange for deep economic reforms does not go off track, and to handle Greece's huge refugee problem.
Of the record 430,000 refugees and migrants who have made the journey across the Mediterranean to Europe so far this year, 309,000 have arrived via Greece, according to the International Organization for Migration.
Many of Greece's partners, particularly in eastern Europe, want Athens to stop allowing the refugees to pass north on a trek to Germany and other wealthy northern countries.
Caretaker migration minister Yiannis Mouzalas was likely to be reappointed, Syriza officials said. Mouzalas is an active member of the Doctors of the World charity, and has taken part in relief missions to trouble spots like Kobane in Syria.
BALANCING THE BOOKS
But it is the implementation of the bailout, which was agreed after months of bitter negotiations in which Tsipras railed against austerity being imposed on Greece, that will be the government's overwhelming task.
Factions like '53+' notwithstanding, Tsipras' re-election on Sunday made his party the dominant force in Greece. His harshest hard-left rebel critics failed to make it into parliament.
"Alexis Tsipras now has the chance to correct the mistakes of his (first) term," center-left newspaper Ta Nea said in an editorial.
"His first cabinet was marked by Syriza's big appointments, such as Yanis Varoufakis, which had particularly bad results. It was also marked by a need to preserve inner party balances which brought the hard-left ... lawmakers to important ministerial posts."
Another reappointment would be Panos Skourletis to the energy ministry, Syriza sources said. He has been criticized for his decision to revoke the permit for a disputed Canadian-run gold mine project in northern Greece in August.
Markets will look at how Skourletis will handle the issue after a Greek court ruled in favor of the investment. He is also expected to seek an alternative plan to the privatization of the country's power grid operator ADMIE.
(Written by Jeremy Gaunt; Editing by Tom Heneghan)