The new government under Costas Karamanlis, which is expected to be sworn in on Wednesday, will face two top priority issues, Cyprus and the Olympic Games.

As talks between Cyprus's government and representatives of the Turkish-Cypriot community in the Turkish-occupied north seem headed for an impasse, unless an unexpected breakthrough occurs over the next two weeks, Greece and Turkey are certain to be directly involved in the negotiations beginning in late March. Greece's direct involvement in the negotiations is likely to be handled by Petros Molyviatis, a 76-year-old retired diplomat and former MP who will almost certainly be appointed foreign minister.

Prime Minister-elect Karamanlis will meet on Saturday with International Olympic Committee President Jacques Rogge, who also wants to meet the new ministers responsible for overseeing preparations for the Games.

PASOK leader George Papandreou pledged yesterday to assist the government with the Cyprus talks and the Olympics.

Karamanlis will also have to immediately replace, or reappoint, the top officers in the armed forces.

The new premier will also want to show straightaway that his government is taking a new direction in governing the country. This will become evident in his ministerial appointments and in the restructuring of the government by the abolition of some ministries and the creation of others. On the legislative front, Karamanlis has said he will give priority to laws enhancing transparency in awarding government contracts for public works and procurement.