UPDATE 2-Greek PM to reshuffle cabinet after new loan tranche - sources

Mon Nov 19, 2012 1:43pm EST

Related Topics

* Samaras plans to give bigger role to coalition partners

* Meets PASOK, Democratic Left leaders before euro group

* Finance minister will stay

By Dina Kyriakidou

ATHENS, Nov 19 (Reuters) - Greek Prime Minister Antonis Samaras will reshuffle his cabinet to give a bigger role to junior coalition party members once he has secured a vital loan tranche in the next few weeks, government officials said on Monday.

Samaras will meet the leaders of junior coalition partners, Socialist PASOK's Evangelos Venizelos and Democratic Left's Fotis Kouvelis, later on Monday to make his proposals and cement their support, officials said.

"The reshuffle will take place after the installment," one government official told Reuters on condition of anonymity. "The Finance Minister will not be moved."

Euro zone finance ministers meet on Tuesday to unlock more aid for Greece and avert bankruptcy, but hopes for a quick disbursement of more than 30 billion euros ($38 billion) remain dim as European Union and International Monetary Fund (IMF) lenders disagree over how to resolve the country's debt crisis.

Samaras would propose deputy prime minister posts to Venizelos and Kouvelis, and offer other cabinet posts to the two leftist parties to secure the widest possible backing in the difficult implementation months ahead, the officials said.

The PASOK leader was open to the prospect but Kouvelis was hesitant, pressured from within his own party, which has already resisted many of the austerity policies that have plunged Greece into its worst recession in decades.

Officials told Reuters on Monday the tranche plus outstanding cash, making a total of 44 billion euros, will be paid on Dec. 5 if Greece meets lenders' conditions.

Greece has fallen short on reforms required to keep a 130 billion euro aid bailout on track, such as increasing competition by liberalising professions and opening up markets.

Measures have been delayed by ministers' lengthy negotiations and by resistance in parliament, especially from MPs from the two junior coalition partners. PASOK expelled six deputies for failing to back an austerity bill this month.

Without the support of the Democratic Left, Samaras's conservative New Democracy and PASOK would have a razor-thin majority of 151 deputies in the 300-seat house.

NO "PR TRICK"

A deputy PM title will be a boost for Venizelos, who has seen senior party members abandon him in recent months after a crushing election defeat. He is expected to propose new PASOK faces for ministerial posts.

Government officials said ministers who have a poor track record with international lenders will be replaced but the finance, development and labour ministers - Yannis Stournaras, Kostis Hatzidakis and Yannis Vroutsis - would stay.

"These are the most successful ministries and nobody can shake the finance minister," the government official said.

Among those likely to go were Administrative Reform Minister Antonis Manitakis, who comes from the Democratic Left party and resisted steps to lay off public servants, sources said.

Also from the Democratic Left, Justice Minister Antonis Roupakiotis, who initially refused to sign an austerity bill, may lose his job, they said.

"It won't be a PR trick to gain time. It will be a rare occasion when a reshuffle is done for practical reasons," said a second government official who declined to be named. "Samaras will aim for consolidation and efficiency."

However, analysts said a reshuffle is unlikely to give the government a much-needed popularity boost and may be seen by voters as catering to internal party politics.

Recent opinion polls show two thirds of Greeks disapprove of the government and see little hope for the future, especially for unemployment, now at over 25 percent. The economy will have shrunk by over 25 percent next year.

"There will be a fuss and the press will keep busy for a while but it will not mean much for the government's effectiveness or public support," said independent political analyst John Loulis.

"In today's climate, people just don't care," he said.

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