–George Papaconstantinou Ousted In Reshuffle
–Vote of Confidence In Parliament Expected Tuesday

ATHENS (MNI) – Greece’s Prime Minister George Papandreou has named
his Defense Minister Evangelos Venizelos to be the country’s new finance
minister, replacing George Papaconstantinou in a widely expected cabinet
reshuffle, the government spokesman announced Friday morning, confirming
earlier media reports.

Evangelos, the top political rival to Papandreou for leadership of
the PASOK (Socialist) party, will also be named vice president of the
government, the spokesman said.

The appointment of Evangelos to the sensitive and highly unpopular
finance portfolio is seen as a political maneuver by Papandreou to
manage any challenge to his leadership from Evangelos and to help
facilitate passage in Parliament of highly controversial austerity
measures demanded by Greece’s European partners and the International
Monetary Fund as a condition of continuing financial aid.

Venizelos was Papandreou’s main opponent for the leadership of
PASOK in 2004, and he publicly disputed Papandreou’s leadership when the
party lost the elections in 2007.

Venizelos is said to hold sway over a group of MPs who have reacted
negatively to the government’s economic policy in recent weeks and could
have brought Papandreou down if they voted against the proposed new
fiscal measures.

Papaconstantinou has become extremely unpopular in Greece, in large
part because he is directly responsible for overseeing an already
draconian austerity policy that has brought tens of thousands of
protesters into the streets almost every day for the past month. The
outgoing finance minister will move to the Environment Ministry.

Papandreou is expected to seek a vote of confidence in Parliament
for his new government next Tuesday. That will be a key test of whether
he is able to secure passage of the new deficit-cutting measures, which
include sharp new cuts in public wages and pensions, the elimination of
around 150,000 public sector jobs, and a E50 billion privatization plan.

Approval of the package by the end of this month is a condition
imposed by the EU and the International Monetary Fund for disbursement
of a E12 billion tranche of Greece’s E110 billion bailout package,
without which the country will be unable to meet financial obligations
coming due in mid-July and would be forced to default.

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