Greece seeks bailout renegotiation

Greece's new government says its bailout renegotiation won’t harm relations with Europe.

Greek vote. Picture: AFP

ATHENS - Greece's new government promised on Thursday to renegotiate the terms of the country's bailout without endangering its future in the euro, trying to ease social tensions but also risking a showdown with European powers.

The three-party coalition called for changes to the deal that is helping Greece avoid bankruptcy after the announcement of an 18-member cabinet dominated by the conservative New Democracy party of Prime Minister Antonis Samaras.

National Bank Chairman Vassilis Rapanos was named finance minister and New Democracy deputy leader Dimitris Avramopoulos became foreign minister.

Once jailed for fighting Greece's 1967-74 military dictatorship, Rapanos must now cure its sick public finances while negotiating with euro zone leaders who are losing patience with Athens after two multi-billion euro bailouts since 2010 that have failed to end the crisis.

"The unity government's goal is to tackle the crisis, open the road to growth and revise terms of the bailout without putting at risk the country's European course, nor its euro zone membership," said a policy document endorsed by the coalition.

Samaras, 61, was sworn in on Wednesday after elections last Sunday ended weeks of uncertainty that rattled financial markets and threatened to push Greece out of the euro zone.

New Democracy narrowly defeated the radical leftist Syriza bloc, which wants to tear up the latest 130 billion euro bailout deal and blames its demands for austerity for driving the country ever deeper into recession.

Samaras said ditching the bailout would mean returning to the drachma, Greece's former national currency, and campaigned on a promise to ease the suffering of Greeks by renegotiating the terms to promote economic growth and jobs.

The coalition's platform particularly challenges euro zone paymaster Germany, which has offered to adjust the lifeline's terms to make up for time lost on two Greek elections since May, but refuses to revise it radically.

According to a party official involved in the coalition talks, the platform includes a two-year extension to the 2014 deadline for Greece to cut its budget deficit to 2.1 percent of national economic output from 9.3 percent in 2011.

Greek officials have said the extension would require an extra 16-20 billion euros in foreign funding.