GREECE named a new cabinet yesterday, ending two months of deadlock. It will face the immediate challenges of trying to revise an unpopular European Union-International Monetary Fund (EU-IMF) bail-out deal and escape a recession.
The announcement came a day after conservative leader Antonis Samaras was sworn in as prime minister following a narrow victory over radical leftists with his promise to keep Greece in the euro at landmark elections on Sunday.
The most watched appointment was that of Vassilis Rapanos, chairman of the biggest lender, National Bank of Greece, who, as finance minister, will spearhead efforts to rescue an economy on life support.
Mr Rapanos was a key player at the economy ministry when Greece joined the euro in 2001 and is seen as close to the socialist Pasok party, one of two junior partners in the coalition with Mr Samaras's New Democracy agreed upon on Wednesday.
The government will also have the backing of the moderate Democratic Left, but both it and Pasok did not contribute their own legislators to the cabinet.
The new foreign minister will be Dimitris Avramopoulos, a former diplomat and former Athens mayor who has been defence minister.
Meanwhile, the Eurogroup of finance ministers gathered in Luxembourg, for what is expected to be a battle on the Greek and Spanish fronts as well as a huddle on runaway borrowing costs for Italy and a last-minute Cypriot cry for help.
Greece is hoping for a two-year extension to 2016 for its recovery plan and a further loan of up to ?20 bn, a finance ministry source said on Wednesday, according to the state-run Athens News Agency.
The country's deepening recession is expected to influence decisions, the official added, pointing to expectations of an economic contraction of up to 6,5% this year compared to a previous 4,7% estimate.
A top EU bail-out official told the euro zone yesterday it had to order Greece to make fresh budget cuts or raise more taxes, warning that euro-zone members will otherwise have to cough up more cash themselves.
Greece's second bail-out, which is stuck in limbo after voters challenged the EU-IMF austerity measures, is "totally off track, months behind schedule", the official, Thomas Wieser, said.
Either you "stick to the fiscal targets and then you need additional measures" from Greece, the Brussels-based official said, or you change deadlines, in which case "you need extra money". Foreign creditors have stressed they are willing to give Greece more time to meet a deficit reduction target set at 2014, but will not change the substance of the February bail-out deal.
Under the current conditions, Greece has to cut ?11,5bn - 5% of its gross domestic product - by 2014. Mr Samaras promised in his campaign to try to put this off to 2016. Greece has been forced to seek bail-outs twice after initially hiding its debt woes. It has also had a ?107bn private debt write-off.