Economist Gikas Hardouvelis was named as finance minister in a cabinet reshuffle on Monday, signaling an intent to keep up a difficult reform drive demanded by foreign lenders funding the country.
A professor and adviser to previous governments, Hardouvelis is considered similar to his predecessor Yannis Stournaras, also an economist and technocrat who steered Greece towards economic recovery after it nearly crashed out of the euro zone in 2012.
But while the 58-year-old chief economist at Eurobank is expected to maintain the same focus on fiscal rigour, he is likely also to push for growth by cutting taxes.
He takes over at a time when Greece has put the worst of its debt crisis behind it, but is still grappling with a jobless rate of over 26 percent and public anger at austerity cuts that have spread poverty and squeezed household incomes.
“It’s all about continuity in economic policy with a more sensitive and human face,» said Theodore Couloumbis of Greek think-tank ELIAMEP.
“Hardouvelis is very close to the kind of policies that have been implemented by the government and suit the EU and the IMF and are not far away from Stournaras’s beliefs.”
The appointment was part of a sweeping reshuffle by Prime Minister Antonis Samaras aimed at wresting back momentum from the radical leftist Syriza party, which won the European Parliament election on May 25 here by a margin of nearly four percentage points over the co-ruling conservatives.
Samaras replaced eight out of 20 ministers in the reshuffle, in an effort to show Greeks that his right-left coalition government is heeding their call for change but without angering foreign lenders who have prescribed austerity for Greece.
“This reshuffle shows that Greece will stay on reform path, and speed up growth without putting at risk budget surpluses,» said a senior government official, who declined to be named.
The changes also allow Samaras to count on the parliamentary support of Andreas Loverdos, a former Socialist PASOK lawmaker turned independent. He was named education minister, boosting the ruling coalition’s majority by one to 153 seats in the 300-seat parliament.
The new cabinet will be sworn in on Tuesday.
A professor of finance and banking at Piraeus University, Hardouvelis previously advised technocrat prime minister Lucas Papademos in 2012 when Greece restructured its debt, imposing losses on private bondholders. He was also chief economic adviser to Socialist prime minister Costas Simitis from 2000-04.
Hardouvelis has in the past referred to the need for active policies to get Greece’s economic wheels turning again, but has also stressed the importance of structural reforms.
“It’s important to continue with structural reforms during the effort to end the recession,» Hardouvelis said in a speech in September. «The future cannot be stagnation. The economy’s structure must change.”
After a six-year slump, the country’s worst peacetime economic crisis, Greece is expected to return to marginal growth this year. Athens returned to bond markets in April after a four-year exile with a successful bond sale.
Much of the credit for Athens’ swift turnaround from near bankruptcy in 2012 has been given to Stournaras, who is now expected to replace Bank of Greece Governor George Provopoulos when his term expires on June 21.
Under Stournaras, Athens also posted a primary budget surplus in 2013, making it eligible for further debt relief by the EU and IMF, with talks expected to begin in the autumn – a next major focus for the new finance minister.