August 27, 2018 / 8:57 AM / a year ago

Tarnished by bailout, Greek PM eyes reshuffle before election

ATHENS (Reuters) - Greek Prime Minister Alexis Tsipras saw his interior minister take up a key post in his leftist Syriza party on Monday, heralding a cabinet reshuffle to shore up waning support after painful bailouts.

FILE PHOTO: Greek Prime Minister Alexis Tsipras addresses the nation from the island of Ithaca, Greece, August 21, 2018. Andrea Bonetti/Greek Prime Minister's Press Office/Handout via REUTERS

In a rousing speech, Tsipras ruled out early elections, telling his party faithful that polls would be held as scheduled in the autumn of 2019, but that his government and the Syriza movement needed ‘new blood’.

The country emerged from the biggest bailout in economic history last week but jaded Greeks found little reason to celebrate after nine years of cuts and job losses.

“It will be the mother of all battles,” Tsipras declared, referring to the election next year, effectively firing the opening salvo to what appears to be a long-drawn out election campaign.

“To give all these battles victoriously we need to rally together, unity and renewal. Our country, the government and the party, need new blood and more appetite to get to work,” he said.

Greece holds parliamentary elections every four years, with the next expected by October 2019 at the latest.

Based on the latest three opinion polls conducted by Greek media, Syriza is trailing the main opposition New Democracy conservatives by between 5.3 and 11.6 percentage points.

Panos Skourletis, the interior minister nominated by Tsipras to become new Secretary of Syriza’s Central Committee, is a party stalwart with widespread support at a grassroots level. He was backed by a wide majority of central committee members and was elected for the post late on Monday.

Tsipras was elected in 2015 promising to end years of austerity for Greece, imposed by international creditors. But he was forced to reverse course by the prospect of the country being kicked out of the euro zone and pursue deeper reforms under a third international bailout program.

“From now on... we no longer have the alibi of implementing a program which is not ours,” Skourletis told the central committee, adding that he saw potential for reform but also challenges for the party in the post-bailout period.

Austerity and political turmoil followed as the economy shrank by a quarter, pushing a third of the population into poverty and forcing the migration of thousands abroad.

The bailout programs concluded last week. Greece has received 288 billion euros in financial aid since 2010.

Tsipras said the government now had the fiscal space to alleviate some tax burden on business and individuals, but was not specific. “We are ready to proceed with brave interventions,” he said.

Government officials have previously said the government may scrap plans for further pension cuts next year.

Finance Minister Euclid Tsakalotos, who steered the country’s exit from the third bailout, was likely to remain in his post, sources said.

Foreign Minister Nikos Kotzias, instrumental in brokering an accord ending years of dispute with Macedonia over its name, was also expected to stay on board.

Reporting by Renee Maltezou and Michele Kambas, writing by Michele Kambas; Editing by Alison Williams and Toby Chopra

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