Bloomberg News

Samaras Revamps Greek Coalition Cabinet to Restore Confidence

June 24, 2013

Greek Prime Minister Antonis Samaras revamped his cabinet after losing one of two coalition partners, giving the socialist Pasok party key ministries in a bid to cement support from his remaining partner.

Pasok leader Evangelos Venizelos was appointed deputy prime minister and foreign minister, government spokesman Simos Kedikoglou said on Antenna TV. Dimitris Avramopoulos, who he replaces at the foreign ministry, was named defense minister, while former Pasok minister Michalis Chrisochoides joins the government as infrastructure minister. Finance Minister Yannis Stournaras remains in his post, as does Development Minister Kostis Hatzidakis.

Samaras overhauled the Cabinet after the Democratic Left party withdrew its ministers on June 21 over his decision to close state broadcaster ERT, sparking concern about the government’s stability that sent bonds and shares sliding. Democratic Left’s departure from the government trimmed the coalition’s support in Parliament to 153 seats in the 300-seat legislature, with Pasok’s 28 lawmakers holding the key to Samaras’s ability to pass laws.

The decision was a setback to the Greek premier’s attempts to convince creditors from the euro area and International Monetary Fund that he has the backing needed to push through reforms linked to 240 billion euros ($315 billion) of international aid.

Bond Yields

The prospect of political instability drove Greek 10-year government bonds down for a fourth day today, pushing the yield up 30 basis points to 11.60 percent, the highest level since April 8. The benchmark Athens general index declined 9.7 percent last week. The bourse was shut for a public holiday today.

The weakening of the coalition government revived concern over the political turmoil that led to two elections last year and sparked fears the country would leave the euro area. Samaras said in an interview in To Vima on June 23 that he will do what he can to prevent an early election because that would wipe out progress made in the past year.

The European Union urged Greece to stick to commitments on economic reforms, saying the reward will be further aid payments. EU Economic and Monetary Affairs Commissioner Olli Rehn urged Greek political leaders to “immediately” stabilize the political situation in statements on June 21 in Luxembourg.

“I appeal to the sense of political responsibility of all political leaders and the Greek people to ensure stability and concentrate on policy rather than politics,” he said.

To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; Marcus Bensasson in Athens at mbensasson@bloomberg.net

To contact the editors responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net; Craig Stirling at cstirling1@bloomberg.net


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