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Greek Cabinet Reshuffle Summary

Tyler Durden's picture




 

In a completely irrelevant move, which will do nothing to help the government pass the much hated mid-term fiscal plan, or diffuse the social anger, this morning as expected George Papandreou picked outgoing Defence Minister Evangelos Venizelos as new finance minister, jettisoning George Papaconstantinou, architect of a belt-tightening programme that has stoked violent unrest and a revolt in his Socialist Party. Reuters correctly observes that the move seemed likely to buy time for the embattled prime minister but did little to dilute scepticism that Greece would be able to implement a new round of deeply painful reforms... Papaconstantinou becomes environment minister in
the reshuffle.The new cabinet is expected to be sworn in later on Friday
and a confidence vote is due by Tuesday night. Rather than giving new
impetus to the reforms, analysts said, the reshuffle was aimed primarily
at quelling dissent in the Socialist Party by moving the unpopular
Papaconstantinou and appointing the prime minister's main party rival
Venizelos." All this means is that instead of Sunday being the critical decision day when the vote of no confidence will be held, it will now be Tuesday, as Europe is now struggling to exist day to day, and push back the inevitable by 24 hours one day at a time. "
The move failed to impress markets and the cost of
insuring Greek debt against default hit a fresh record above 2,000
basis points on Friday.
"

As Zero Hedge reported, the original candiate for the job, former Fed and ECB member Lucas Papdemos, declined the offer to be scapegoated for G-Pap epic failure:

Papandreou originally wanted Lucas Papademos, an internationally respected former deputy head of the European Central Bank as finance minister, analysts said. He would have impressed markets more, but he turned down the job. Announcement of the reshuffle was delayed from Thursday to Friday indicating Papandreou's difficulty in getting a party figure to take on the Finance Ministry.

Bottom line is that this is just another ploy to buy some time:

"This buys Papandreou just a little time. By putting Oikonomou and Venizelos in government, he makes sure that the mid-term budget plan will pass. But this just delays his problems.... Those who are called to implement the mid-term budget plan believe less in it than Papaconstantinou," former Finance Minister Stefanos Manos told Reuters.

Papandreou originally wanted Lucas Papademos, an internationally respected former deputy head of the European Central Bank as finance minister, analysts said. He would have impressed markets more, but he turned down the job. Announcement of the reshuffle was delayed from Thursday to Friday indicating Papandreou's difficulty in getting a party figure to take on the Finance Ministry.

Venizelos, a ruling PASOK party heavyweight, has held several cabinet posts in the past including those of government spokesman, justice minister and development minister.

In 2007, he challenged Papandreou for the party leadership.

The government aims to pass the austerity package by the end of June and must then begin work on a new set of laws to implement it.

The protests against the reforms, which include plans to raise 50 billion euros through privatisations, have combined with political infighting and euro zone indecision to spook international markets.

And here, again courtesy of Reuters, is the immediate and very much skeptical Wall Street response:

Following are analysts' comments on the reshuffle:

STEFANOS MANOS, FORMER FINANCE MINISTER

"This buys Papandreou just a little time. By putting (outspoken backbencher Pantelis) Oikonomou and Venizelos in government, he makes sure that the mid-term budget plan will pass. But this just delays his problems for 15 days."

"Oikonomou, in particular, belongs to the populist wing of PASOK. Oikonomou and Venizelos are both less willing and able than Papaconstantinou to reduce the size of the state, which should be the main priority, in my view."

"Those who are called to implement the midterm budget plan believe in it less than Papaconstantinou."

YANNIS VAROUFAKIS, PROFESSOR OF ECONOMICS, UNIVERSITY OF ATHENS

"The reshuffle of the Greek government is going to be treated by history with the contempt it deserves."

"Given the fact that for 24 hours we've been told (former European Central Bank Vice President Lucas) Papademos was Papandreou's last resort, the announcement that Venizelos is getting the job discredits the finance minister before he even moves into the finance ministry."

"The whole government is breathing its last breath. This is a transitional government that will be ineffective and will resemble one of the six governments in Argentina during its pre-default era."

NIKOS CHRISTODOULOU, ANALYST, MERIT SECURITIES

"The reshuffle is being viewed positively by the market. It creates conditions of stability even though the situation is still critical."

"It will be a difficult summer because foreigners are still asking for political consensus and the new bailout might not come before September."

COSTAS PANAGOPOULOS, HEAD OF ALCO POLLSTERS

"It's not an impressive reshuffle. The prime minister is only using party officials. It is a reshuffle that smoothes out imbalances in the party."

"What is important is that the new scheme is smaller and more efficient, and for the first time we have a body -- a government committee -- which is positive as a lack of coordination was obvious in the former government."

"However, with this reshuffle he mainly just recycled faces."

"I also believe that there was a political agreement between the two -- Papandreou and Venizelos -- and the question is whether in this framework the economic policies will change, probably towards a more popular direction."

BEN MAY, EMEA ECONOMIST, CAPITAL ECONOMICS

"From an IMF/EU perspective what matters is that they stay on the right path, not who says it. I wouldn't have thought it (who holds the finance minister post) would make a huge difference either way."

ALEXANDER KYRTSIS, ANALYST, UBS

"Venizelos is politically powerful and that might bode well for the implementation of fiscal consolidation, even though he has no track record in financial matters. His appointment means that the government will likely get the vote of confidence."

Keep your popcorn for Tuesday early afternoon eastern time. It could be a doozy.

 

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Fri, 06/17/2011 - 07:04 | 1376948 Cassandra Syndrome
Cassandra Syndrome's picture

Rumours of a €150 Billion bailout. They just don't get it, if there is another bailout the strings attached will be that severe that the Greeks will burn the place and the default will be even more severe plus the extra funds.

The Powers That Be long term view is now down to 1 week. Game Over.

 

Fri, 06/17/2011 - 07:09 | 1376952 hamurobby
hamurobby's picture

150b is almost twice the "original" estimate, it will probably end up being 300b before its finally tossed.

Fri, 06/17/2011 - 07:14 | 1376957 CPL
CPL's picture

Kidding me, TPTB are already sabre rattling in China if anyone hadn't noticed.  Besides look at those STRONG MARKET FUTURES we're going to break 12k before open.

 

Like magic!!  On bad news, bad earnings, awful situation.

 

So don't worry about it.  QE3 already happened, we need to fund that massive nuclear war we are about to have later this year.

Fri, 06/17/2011 - 07:13 | 1376953 Paralympic Equity
Paralympic Equity's picture

Aaaaand the markets went again on full retarded mode. Dax now up 1,15%...

After the shitload from Merkel and Bonaparte, that they have agreed on the agreement that nothing is agreed, the markets went vertical, are traders retarded?

Fri, 06/17/2011 - 07:16 | 1376958 CPL
CPL's picture

Yup...for no reason other than the children in charge can make the money and the rules.  We'll see how this turns out over the weekend.

 

CTRL-ALT-BANK

Fri, 06/17/2011 - 07:28 | 1376981 ratso
ratso's picture

Strike up the old Titanic band.  When the music stops, nothing will have changed except that the end will be more clearly in sight.

Fri, 06/17/2011 - 07:24 | 1376964 Tense INDIAN
Tense INDIAN's picture

Its all about Sentiment..thats it

Fri, 06/17/2011 - 07:25 | 1376967 GeneMarchbanks
GeneMarchbanks's picture

Your question presupposes that there are "markets" and, what I'm assuming, you mean by "traders", are humans. Not sure this is the case but, whatever.

Fri, 06/17/2011 - 07:34 | 1376997 Paralympic Equity
Paralympic Equity's picture

My mistake, sorry.

I have this naive and romantic view of the market, I see people participating in creating demand and supply, but you are right.

Fri, 06/17/2011 - 07:26 | 1376970 hamurobby
hamurobby's picture

I think its covering at resistance from yesterday in the euro and usd, by next week we should hit resume, and maybe by this afternoon.

Fri, 06/17/2011 - 07:12 | 1376954 Mae Kadoodie
Mae Kadoodie's picture

So the outgoing Defense Minister is now the Finance Minister?  How hard could that job be?

Fri, 06/17/2011 - 07:20 | 1376965 chump666
chump666's picture

hahahaha i know and the greek protesters are thinking whats next martial law

Fri, 06/17/2011 - 07:14 | 1376955 bigdumbnugly
bigdumbnugly's picture

may i be the first to reference rearranging the deck chairs on the titanic?

that ususally comes up in situations like this.

 

Fri, 06/17/2011 - 07:18 | 1376956 Tense INDIAN
Tense INDIAN's picture

Tyler ...i was dissapointed to see that you did not make the list ...::

 

http://www.activistpost.com/2011/06/10-most-influential-people-in.html#more

Fri, 06/17/2011 - 07:24 | 1376973 Arius
Arius's picture

which raises my faith on ZH ....

Fri, 06/17/2011 - 07:20 | 1376960 chump666
chump666's picture

getting comical ancient Rome style.  Greece is gone. 

good stuff zero hedge. we are about to witness the beginning of the end

Fri, 06/17/2011 - 07:18 | 1376962 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

It's a damn shame you can't take the best elements from the US and the best elements from europe and mingle them. Then you'd get a population to kick out the banksters:

Best things about europeans: quicker to take to the streets, more educated, hot chicks, good diet, romantic lifestyle

Best things about Americans: closer to the land/history of self-sustainability, armed, less liberal minded PC pacifist crap is spoken

If only, if only....!

Fri, 06/17/2011 - 07:20 | 1376963 Corduroy
Corduroy's picture

Greek government is full of shit. Merky and Sarkastik are full of shit. Bennie is full of shit. Sterlin Merlin is full of shit. Obamalade is full of shit. The stock markets are full of shit.

The facade will not last the summer.

Fri, 06/17/2011 - 07:22 | 1376969 litoralkey
litoralkey's picture

NATO's southeastern air superiority is paramount.

Erdogan and the Islamists in Turkey sealed GReece's financial rescue... when in 2003 Turkey refused the US 4th Infantry Division access to northern Iraq and later on Erdogan and his allies restricted movement at Incirlik Air Base, and when US friendly Turkish military conspirators were arrested en masse.  When the 4th ID finally did enter Iraq (via ship and from the south several weeks later), they were at that point carrying a battalion of the Greek Army with them, as a direct FU to Erdogan.

Evangelos Venizelos controls one of the largest (US built and paid for) air wings in NATO.  NO matter what happens on the streets of Athens, there Greek air bases are going to continue to be well funded and secure operations.

Fri, 06/17/2011 - 07:34 | 1376995 spanish inquisition
spanish inquisition's picture

The only thing the Greeks can do to impress the markets at this point is to default. Spend 5 years rebuilding like Iceland, rather than be in slavery for 30. 

http://www.bloomberg.com/news/2011-06-15/greece-ireland-can-t-default-like-iceland.html

“Iceland should be humble and avoid advising other countries, especially when it comes to banking,” Sigfusson said. “What happened was an emergency situation which couldn’t be avoided.”

(Translation - Fuck yeah, do it. I just can't say so, or they will invade us)-

Fri, 06/17/2011 - 07:51 | 1377024 NuYawkFrankie
NuYawkFrankie's picture

Cant someone do sumthin about these freekin Greek names?  Get 1/2 way thru any report on this topic & realise I havn't got a freekin clue who the players are.

Must be some sorta script that can translate "Doppadoopalous" into "Smith", Papapopppolis into "Jones" etc.

Othersiwse its all freekin Greek to me :( 

Fri, 06/17/2011 - 07:49 | 1377028 NuYawkFrankie
NuYawkFrankie's picture

Cant someone do sumthin about these freekin Greek names?  Get 1/2 way thru any report on this topic & realise I havn't got a freekin clue who the players are.

Must be some sorta script that can translate "Doppadoopalous" into "Smith", Papapopppolis into "Jones" etc

Otherwise, its all freekin Greek to me :(

Fri, 06/17/2011 - 07:54 | 1377031 NuYawkFrankie
NuYawkFrankie's picture

Cant someone do sumthin about these freekin Greek names?  Get 1/2 way thru any report on this topic & realise I havn't got a freekin clue who the players are.

Must be some sorta script that can translate "Doppadoopalous" into "Smith", Papapopppolis into "Jones" etc

Otherwise, i'm afraid, its all freekin Greek to me :(

Fri, 06/17/2011 - 07:53 | 1377034 huggy_in_london
huggy_in_london's picture

like jamie dimon did to his name!

Fri, 06/17/2011 - 07:59 | 1377044 NuYawkFrankie
NuYawkFrankie's picture

Dimond greek as well?

Fri, 06/17/2011 - 13:14 | 1378029 jmc8888
jmc8888's picture

Outgoing defense minister? Nothing like knowing where to put the troops when deciding on how to screw your people for the banksters. 

What a farce.

Glass-Steagall

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