Greek PM Under Pressure to Reshuffle Cabinet - Sources
-- Greek PM under pressure to reshuffle cabinet - sources
-- Former ECB VP Papademos may be next finance minister - sources
-- Cabinet reshuffle possible after late-June vote - sources
By Costas Paris
Of DOW JONES NEWSWIRES
ATHENS (Dow Jones)-Greek Prime Minister George Papandreou faces growing pressure from his Socialist Party to reshuffle his cabinet in an attempt to defuse public anger over another round of spending cuts.
Two senior officials--a senior Socialist Party leader and a cabinet minister--said the government's survival could depend on reseating top cabinet posts after the parliament votes through the new austerity measures at the end of June.
Public protests over deep government spending cuts has been growing as Greece struggles through the worst economic crisis in the country's recent history. Government insiders worry about eroding public support for reforms.
In a nationwide poll published Sunday by the Kathimerini newspaper, Papandreou's Socialist PASOK Party trails the conservative opposition New Democracy party for the first time since the 2009 elections.
Pressure to replace Finance Minister George Papaconstantinou is particularly strong, these officials said. If the cabinet were reshuffled, Papaconstantinou would probably receive another cabinet post or leave government. They said Lucas Papademos, a former European Central Bank vice president, has been raised as a possible replacement to take on one of the toughest jobs in Europe.
Papaconstantinou holds the full confidence of the prime minister, these officials said. But the finance minister has been the chief object of public anger in his role as chief knife-wielder to deliver budget cuts demanded by the European Union and the International Monetary Fund after Greece's EUR110 billion bailout last year.
"There are increasing calls by the party and some members of the cabinet for a major reshuffle and Papaconstantinou tops the list of those that must be replaced," a senior party official said.
Most Socialist parliamentary deputies pushing for a cabinet change have done so privately. The most outspoken has been Socialist deputy Dinitris Litzeris, who called for "resignations and a change of policy by the economic team."
A spokesman for the prime minister's office didn't return calls seeking comment Tuesday.
Papaconstantinou couldn't be reached for comment. A finance ministry spokeswoman said a reshuffle can only be decided by Papandreou, without elaborating.
A cabinet minister who asked not to be named noted talk among insiders that Papandreou may ask Papademos to replace Papaconstantinou.
"He is widely respected in Greece, the ECB and within the euro zone," the minister said.
Papademos declined to comment when reached by Dow Jones Newswires.
Labor unions have called for a nationwide general strike on Wednesday. On Sunday, tens of thousands of angry Greeks demonstrated in central Athens against a new wave of austerity measures that the country has promised to its international creditors to avoid default.
Protesters call for popular resistance to the new measures, which include cuts in salaries and pensions and a series of new taxes, privatizations and spending cuts.
Since May last year, when Greece got a EUR110 billion loan, the Socialist government has been under special EU, IMF and European Central Bank supervision as it struggles fix its public finances and reform the economy.
The government has failed to fulfill many of its promises of reforms and deficit reduction, prompting the EU and the IMF to discuss ways to come up with a second loan this month to keep Greece from going bankrupt.
In return, Greece now has agreed to implement a deeply unpopular EUR28.4 billion austerity package that aims to cut the budget deficit below 1% of gross domestic product by 2015, from 10.5% of GDP last year.