The Greek prime minister, Antonis Samaras, has forged ahead with a wide-ranging reshuffle, appointing a non-partisan US-trained academic as finance minister in an attempt to rejuvenate a government clinging to power with a majority of two.
The shake-up, which saw the economics professor Gikas Hardouvelis replace Yannis Stournaras at the helm of the finance ministry, followed the drubbing Samaras’ co-ruling centre-right New Democracy party received at the hands of the radical left Syriza party in European elections in May.
Hardouvelis, a no-nonsense reformer, assumed the post at a particularly sensitive moment as Greece prepares to embark on debt negotiations with the foreign lenders keeping its economy afloat. At almost 180% of GDP, the country’s debt load is by far the largest in Europe – and a major obstacle to its economic recovery.
Stournaras, who oversaw Athens’ return to international capital markets in April, four years after it narrowly averted bankruptcy with the biggest bailout in global financial history, is likely to be appointed the next governor of the Bank of Greece.
The reshuffle on Monday could be the key to the country’s political stability. Half-way through his four-year term in office, Samaras has come under increasing pressure from anti-bailout parties on the left and right. The neo-fascist Golden Dawn party, which has seen its support surge on the back of record unemployment, emerged as the third biggest political force in the recent European parliament poll.
Ministers seen to have provoked popular anger were removed in the reshuffle. The health minister, Antonis Georgiades, who had been responsible for controversial cuts in social welfare spending, was dropped, and Nikos Dendias, the hardline public order minister, was relocated to the helm of the development ministry.
But all eyes will be on Hardouvelis who, though widely respected abroad, is less well known at home.
The former chief economist at Eurobank and the overseer of economic policy for two previous Greek prime ministers has his work cut out for him. After seven years of recession Greece faces significant levels of competition, dropping exports and the highest joblessness rate in the EU.
Hardouvelis has previously criticised the way creditors at the EU, European Central Bank and IMF have handled the economy, voicing fears that, after years of punishing austerity, further pressure from the “troika” could destabilise Greece politically.
The new cabinet will be sworn in on Tuesday.