Greece names new cabinet with vow to revise bailout

Greece named a new cabinet to end two months of political deadlock on Thursday and said it would aim to revise the terms of an unpopular EU-IMF bailout deal without risking its eurozone membership. The announcement came a day after conservative leader Antonis Samaras was sworn in as prime minister following a narrow victory over radical leftists who still won a quarter of the vote with their call to tear up the bailout deal. A joint statement by conservative, socialist and moderate leftist parties in the new coalition said the aim was "to revise terms of the loan agreement without endangering the country's European course and its place in the euro." The new team also pledged to honour Greece's targets on deficit reduction, debt control and structural reforms after landmark elections on Sunday, amid intense international pressure for Greece to get its reforms back on track. "The goal is to create the conditions to take the country out of the crisis for good and out of dependence on loan agreements in the future," it said. The most closely-watched appointment was that of Vassilis Rapanos, chairman of Greece's biggest lender the National Bank of Greece, who will as finance minister spearhead efforts to aid an economy now in a fifth year of recession. The new foreign minister will be New Democracy's Dimitris Avramopoulos, a former diplomat and ex-Athens mayor who was previously defence minister. Greek media said Rapanos will be sworn in Saturday after a round of European talks in Luxembourg where the outgoing minister is representing Greece. The coalition is led by Samaras's New Democracy party and will have the backing of the socialist Pasok party and the small Democratic Left party, although both junior partners did not include their lawmakers in the cabinet. Some analysts said the move was designed to avoid responsibility for enforcing contested austerity measures, others that it was a way of making the government more popular by promoting technocrats instead of politicians. European Commission president Jose Manuel Barroso hailed the new line-up saying he was "reassured" by the government's parliamentary support. "I believe that this sends a clear signal of Greece's determination to honour its commitments and stay in the euro," he said. Greece is hoping for a two-year extension to 2016 for its recovery plan and a further EU-IMF loan of up to 20 billion euros ($25 billion), a finance ministry source said earlier, according to the state-run Athens News Agency. A top EU bailout official meanwhile told the eurozone on Thursday that it must order Greece to make fresh budget cuts or raise more taxes, warning that eurozone members will otherwise have to cough up more cash themselves. Either you "stick to the fiscal targets and then you need additional measures" from Greece, the Brussels-based official, Thomas Wieser told AFP, or you change deadlines, in which case "you need extra money." Foreign creditors have stressed that they are only willing to give Greece more time to meet a deficit reduction target currently set at 2014 but will not change the actual substance of the bailout deal agreed in February. Under current conditions, Greece has to cut 11.5 billion euros ($14.6 billion) -- or five percent of its gross domestic product -- by 2014. Greece has been forced to seek bailouts twice, first for 110 billion euros in 2010 and then for 130 billion euros earlier this year. It has also had a 107-billion-euro private debt write-off. Analysts said the bailout talk would prove crucial to the government's future. "I don't think it will be stable. A strong factor will be the memorandum negotiations," said Manolis Alexakis, an assistant professor of political sociology at the University of Crete. But Paschos Mandravelis, a columnist for the liberal Kathimerini daily, said: "The vote showed people favoured pro-European parties even though there is a price to pay. This will create a more stable government." After being named on Wednesday, Samaras vowed to do his utmost to restore growth and promised his people they could have hope. "With God's help we will do everything we can to take the country out of the crisis," the 61-year-old told reporters. His election has eased fears of an immediate euro exit for Greece although some analysts warn financial pressures may eventually prove too much. New Democracy took 129 of the 300 parliamentary seats including an extra 50 seats given to the winner and Syriza took 71 seats. Pasok took 33 and Democratic Left won 17, which gives the new government a majority of 29 seats.