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Greek new cabinet takes office after reshuffle, rocky path ahead

By  Maria Spiliopoulou (Xinhua)

08:35, June 26, 2013

ATHENS, June 25 (Xinhua) -- Greece's new cabinet assumed office on Tuesday, following a broad reshuffle triggered by an uproar which brought back briefly the spectre of political uncertainty in the debt-laden country at a crucial crossroads on the path to economic recovery.

The coalition administration overcame the risk of collapse following the withdrawal of the smaller partner on last week over a dispute regarding the overhaul of the state broadcaster ERT, a first key test in the reform drive.

However, the road ahead is rocky, and the task is Herculean, political commentators warned in Athens.

The political crisis which erupted over ERT and the withdrawal of the Democratic Left (DIMAR) party from the coalition, represents Prime Minister Antonis Samaras' biggest and most likely sole opportunity against this difficult backdrop -- a chance for a fresh start, they added.

The new government coalition of the conservative New Democracy party of Samaras and the socialist PASOK party of Evangelos Venizelos who entered the new cabinet as Deputy prime minister and foreign affairs minister might become more flexible in decision-making without DIMAR, observers argued.

"The good scenario wants the new bipartisan government to be more homogeneous and focused on reforms than its predecessor, although it will not enjoy the same support in parliament," according to analyst Dimitris Kontoyannis of "Kathimerini" (Daily) newspaper.

He warned though that the two-partite coalition's slimmed majority of just three votes in the 300-seat parliament poses a great challenge. For the time being DIMAR and several independent legislators have indicated that they will support the government in critical measures to exit the crisis.

Analysts fear that there is the pressure from a certain part of Greek society which still resists change and opposes the current austerity and reform program to counter the crisis, arguing that it worsens problems rather than resolving them, deputies and subsequently the government might "water down" the needed reforms, in particular the overhaul of state services, to avoid upheaval.

The drama over the state broadcaster is characteristic of the challenges that lie ahead on the road to reform Greece. Samaras' decision to pull the plug off "one of the symbols of waste" and dismiss the 2,700 staff overnight in order to make way for a slimmer and more efficient organization to take over by September, ignited mass protests by trade unions and strong reactions by political parties, including within the coalition.

ERT's closure was the first time in decades a Greek government proceeded to the shutdown of a public entity and the sacking of thousands employees as part of commitments undertaken under bailout agreements.

Athens has promised to dismiss 4,000 civil servants by 2014 and a total of 15,000 by 2015 to slash deficits and strengthen efficiency in state services.

Although the new cabinet assumed office, ERT's dismissed personnel continues the occupation of the broadcaster's headquarters, broadcasting via the Internet.

Pantelis Kapsis, a veteran journalist who was sworn in on Tuesday as deputy minister responsible for the state broadcaster, stressed the need to restructure the ERT, calling on defiant employees to "become part of the solution."

The first key test for the new government in the assembly in coming weeks, according to analysts, may be the vote on the final plan to restructure the national broadcaster.

Meanwhile, on the other hand, Greece faces increasing pressure from its creditors who keep the country afloat since 2010 with bailout aid to quickly implement the needed policies in order to meet targets and timetables to exit the crisis.

Inspectors of the European Union and the International Monetary Fund lenders, who resume the review of Greece's fiscal adjustment and reform program in Athens next week, are expected to request a list of 12,000 civil servants to be put on a mobility program by the end of July and a comprehensive taxation system reform plan.

They are expected to push for the acceleration of the privatization program which has hit snags this year and a plan to cover an expected fiscal gap next year.

The main message from Greece's creditors towards the reshuffled government and Greek people is not to backpedal on reforms to keep alive the hope of recovery and a better future in a period when the first positive signs have emerged.

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