Greece to choose new finance minister to tackle debt

Reuters News
Posted: Jun 23, 2012 10:29 AM

By Deepa Babington

ATHENS (Reuters) - Greek coalition leaders aim to agree on a new finance minister on Tuesday after their first choice deepened the chaos surrounding the country's debt crisis by resigning over ill health a few days after being named.

Vassilis Rapanos quit on Monday less than a week after the conservative-led government took office with the huge task of trying to persuade foreign lenders to soften the terms of an international bailout that has enraged Greeks.

Rapanos, a former political prisoner, was admitted to hospital on Friday suffering dizziness and abdominal pains. He said he had resigned on the advice of doctors.

Prime Minister Antonis Samaras, himself recovering from eye surgery, will meet leaders of his two coalition allies - the Socialist PASOK party and the smaller Democratic Left - at his home, a government official said. A decision was expected on Tuesday, he added.

No front-runner for the post - one of the world's toughest jobs - has emerged. The new finance minister faces a difficult juggling act - pushing for more time and money from skeptical foreign lenders while coaxing reluctant officials at home to push through unpopular reforms.

Greek media have cited a long list of potential names, including outgoing technocrat finance minister George Zanias as well as respected economists Yannis Stournaras and Gikas Hardouvelis.

New Democracy leader Samaras, who emerged from hospital on Monday with a bandage over one eye, will not attend a European summit on Thursday and Friday and it is also unclear whether a new finance minister will be ready to go.

Instead, Greece is likely to be represented by outgoing Finance Minister George Zanias in a delegation headed by President Karolos Papoulias.

Greece had initially put forward Foreign Minister Dimitris Avramopoulos as well, but was told protocol did not permit him to take the place of the prime minister, the official said.

The "troika" of EU, European Central Bank and International Monetary Fund lenders, who were due back in Athens on Monday, postponed their trip because of the illness of Samaras and Rapanos.

The delays pile even more pressure on Greece's wobbly finances. The country will run out of money next month unless lenders release the next batch of aid under its 130-billion-euro bailout.

That tranche is unlikely to be granted without a showdown with lenders exasperated by Greece's inability to push through vital reforms and its plan to dilute the terms of the austerity program agreed in exchange for the financial rescue.

The bailout has prevented Greece from going bankrupt and suffering a humiliating exit from the euro zone, but it has also deepened a recession now in its fifth year, left one out of five Greeks jobless and caused violent protests in Athens.

Emboldened by growing anger across Europe against German-led austerity, the Greek government has said it will take its case for renegotiating the bailout conditions to Brussels and the United States as soon as the prime minister is well enough.

(Additional reporting by Lefteris Papadimas and George Georgiopoulos; editing by Barry Moody)