By Nektaria Stamouli
ATHENS--Greece's coalition government announced a sweeping
cabinet reshuffle Monday in an attempt boost its popularity after
losing ground in last month's European Parliament elections.
Among the changes, economist Gikas Hardouvelis was appointed
finance minister, replacing Yannis Stournaras, who is expected to
take the helm at Greece's central bank when the term of the current
governor expires later this month.
Mr. Hardouvelis, 59, is currently a professor of economics at
the University of Piraeus and chief economist at Greek lender
Eurobank Ergasias SA. An experienced technocrat with a long
background in government, the appointment of Mr. Hardouvelis is
seen as signaling a continuation in Greece's ongoing reform
efforts.
Most recently, he served as a senior adviser in the interim
government of former Prime Minister Lucas Papademos and was
instrumental in helping negotiate Greece's private-sector debt
restructuring in 2012. Mr. Hardouvelis also served as an economic
adviser to former Prime Minister Costas Simitis between 2000 and
2004.
Mr. Hardouvelis will be tasked with pushing through a number of
difficult overhauls in the months ahead, as well as nursing
Greece's recession-ravaged economy back to growth after six years
of recession. In a reprise of his previous role, he will also
negotiate further debt relief for the country later this year with
Greece's official creditors-- the European Union, the International
Monetary Fund and the European Central Bank.
His first test will come in the next few weeks when a delegation
of international inspectors from the EU, the IMF and the
ECB--commonly known as the troika--is expected to return to Athens
to assess whether the country's reform program is on track.
But Greece finds itself in much better shape than when Mr.
Hardouvelis was last in government. Since then, his predecessor,
Mr. Stournaras, has pushed through many of the difficult reforms
demanded by creditors. He has also produced Greece's first primary
budget surplus--excluding debt payments--in a decade and issued the
country's first long-term bond this year after a four- year hiatus
from international debt markets.
The cabinet reshuffle follows dual local and European Parliament
elections two weeks ago, which were widely seen as a test of
confidence in Greece's current two-party government.
Voters in the European Parliament elections handed the leftist,
opposition Syriza party its first electoral victory in its history.
It came in first with 26.7% of the vote, some four percentage
points ahead of the conservative New Democracy party that dominates
the coalition government.
But a better-than-expected showing in both elections by the
junior partner in the coalition, the socialist Pasok party,
prevented Syriza's showing from to delivering a crippling blow to
the coalition, as most voters appeared to eschew the leftist
party's calls for fresh national elections.
As a result of the outcome in the country's dual votes, Pasok
will strengthen its role in the current government, adding to the
number of seats it holds in the cabinet.
Among the more significant additions was the return of former
Pasok, and now independent, lawmaker Andreas Loverdos back to the
government fold, and boosting the coalition's overall majority in
Parliament to 154 seats in the 300 seat chamber. Mr. Loverdos, who
previously served as both minister of labor and minister of health,
will be education minister in the new cabinet.
The new government will be sworn in Tuesday afternoon followed
by the first meeting of the new cabinet.
Since entering recession in 2008, Greece's economy has shrunk by
more than a quarter--in part due to tough austerity measures that
the country's creditors have demanded in exchange for international
loans. The downturn, combined with the measures, has left more than
a quarter of the workforce unemployed and pushed tens of thousands
of businesses into bankruptcy.
Such harsh conditions have fueled the rise of Syriza and stoked
public anger against the two governing parties that have dominated
Greece's political landscape for the past four decades. In
addition, the crisis has also seen the emergence of a variety of
smaller and newer parties, ranging from the far-right Golden Dawn
party to the three-month-old, center-left To Potami party.