C O R R E C T E D COPY - GREECE: IF ND WINS, WHO'S

S E C R E T ATHENS 001834

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/12/2017
TAGS: PGOV PREL GR
SUBJECT: C O R R E C T E D COPY - GREECE: IF ND WINS, WHO'S
IN KARAMANLIS'S NEW CABINET?

REF: A. ATHENS 1785


B. ATHENS 1804

C. ATHENS 1621

Classified By: CHARGE D'AFFAIRES A.I. THOMAS COUNTRYMAN.
REASONS 1.4 (B) AND (D).


1. (C) SUMMARY AND INTRODUCTION: Although the race is tight,
conventional wisdom (and unpublished polls) suggest New
Democracy will win enough votes in the September 16 elections
to maintain a slim parliamentary majority. PM Karamanlis has
spoken of his desire to make the next government "smaller"
and "more agile," but few sources expect wholesale personnel
changes. Many observers believe officials most likely Qe Minister of Public OQ
of Merchant Marine Kef`ent of the
Financial`as. Well-placed sources iy have also told us MinisQ
leave. Foreign Minis4lan Roussopoulos
and ships of the police and intelligence service, as
well as most of the government's economic team, are expected to
remain. Signals are mixed on Defense Minister Meimarakis, who
could move to the Interior Ministry, which is responsible for
appointments and election oversight. Former CHOD Chinofotis is
running for parliament on the ND ticket and is expected to be
named deputy defense minister, if not MOD.
END SUMMARY AND INTRODUCTION.

THE INNER CIRCLE
--------------


2. (S) Most observers expect government spokesman Thodoris
Roussopoulos -- regarded as one of the most influential
figures in the Karamanlis administration -- to remain in his
position in a new ND government. Sources point out that,
during recent forest fires, Roussopoulos had resigned his
appointed post to run a campaign for his own seat in
parliament. With criticism mounting, PM Karamanlis called
him back to manage GOG PR, promising that Roussopoulos would
enter the next parliament as one of the five "leader's
choice" MPs if ND won a majority.

FOREIGN AFFAIRS
--------------


3. (S) PM Karamanlis is unlikely to change his foreign
minister, and FM Dora Bakoyannis -- member of the Mitsotakis
political dynasty, major player in ND politics in her own
right, and a Karamanlis rival -- could pose more of a
political threat to Karamanlis outside the government than
in. In addition, keeping her in the FM slot would make her
responsible for future key decisions, such as Macedonia's
NATO membership.


4. (S) Most of the action at the Foreign Ministry will
probably be at the deputy-minister level. Deputy FM
Evripidis Stylianidis, a 41-year-old rising star in the
government, could move to a deputy position in MOD where
there are many more resources to manage. Deputy FM Yannis
Valinakis, elected on the national slate for ND, is running
this time for his own seat in the Dodecanese. If elected, he
could be a candidate for Minister of the Aegean. That would
free up two deputy minister slots. There are certainly
several "hungry" ND politicians ready to take on the jobs,
including Corfu parliamentarian Nikos Dendias. Below the
minister and deputy minister levels, most other positions in
the MFA are occupied by professional diplomats and civil
servants and would be unlikely to change as a result of the
election.

DEFENSE
--------------


5. (S) With his background as ND strategist and party
apparatchik, Vangelis Meimarakis has been an uncomfortable
fit as defense minister since his appointment 18 months ago.
Last fall he made a visible effort to get more engaged in
defense issues but remains more suited to a party, as opposed
to a policy, position. He reportedly has asked Karamanlis to
be replaced. Some observers believe that in a new ND
government he would move back to party secretary or to the
Interior Ministry, one of the most politically powerful state
institutions because of its control of appointments and
elections. If Meimarakis were to move, a possible successor
would be current Minister of Transportation Michalis Liapis,
a first cousin of the PM.


6. (S) Former CHOD Admiral Panagiotis Chinofotis, who
resigned in order to run for an ND seat on the nationwide
ticket, could also be a candidate for minister, though some
observers believe his lack of political experience would not
allow him to move higher than deputy minister. The second
MOD deputy position was only recently created, and there is
speculation that a Deputy Minister Chinofotis would ask for
its abolition or significant contraction. Current deputy
minister Vasilios Michaliakos is said to be on the way out
because of his connections to organized crime and corruption
in Peiraias. We would expect major changes in the uniformed
leadership to be put off until early spring during the
traditional promotion/transfer season.

PUBLIC ORDER AND JUSTICE
--------------


7. (S) The Greek Ministry of Public Order (MPO) oversees both
the police and intelligence service. MPO Minister Vyron
Polydoras has been one of the most outspoken and
controversialfigures in this government. Indeed, many
observers believe Polydoras has become a political liability,
and it is widely assumed that he would be replaced in a new
ND government. There has been little discussion of a
successor, but some observers have sggested Karamanlis is
planning to merge MPO wth the Interior Ministry as part of
his streamlining program, thus mooting the point.


8. (S) The naming of police chiefs is on a February/March
schedule similar to flag officer appointments at the MOD.
Current Police Chief Anastasios Dimoschakis is well into his
second year and only very rarely do chiefs serve a third
year. Hellenic National Intelligence Service (EYP) head
Ambassador Ionnis Corandis has told us he believes he would
stay on in a new ND government. Some in the GOG, however,
ae dissatisfied with EYP performance and would like to see a
change. In the Justice Ministry, Secretary General
Panagiotis Panouris confirmed to Charge September 12 that
Minister Anastasios Papaligours and Panouris himself would
move out after the election.

ECONOMIC MINISTRIES
--------------


9. (S) The ND government called the early election and is
campaigning on its strong economic performance (ref c).
Thus, we anticipate that a new ND government would retain
most, if not all, its economic personnel. Finance Minister
Georgios Alogoskoufis, despite a reputation for plowing ahead
without GOG interagency coordination (e.g. when his work
resulted in a twenty-five percent upward estimation of
Greece's GDP) is anticipated to remain in his position.
Alogoskoufis' deputy ministers responsible for tax
collections (Adonis Bezas) and disbursal of EU structural
funds (Christos Folias) are likewise expected to remain --
despite the latter's clear desire to gain a ministerial
portfolio himself. (NOTE: a key element of the ND
government's economic planning is to retain and disburse all
EU structural funds ) something not always possible if
project proposals are not executed within specified
timeframes. END NOTE.)


10. (S) Minister of Development Dimitri Sioufas has been
responsible, inter alia, for advancing Greece's geostrategic
position as an "energy bridge" to Europe. With both the
Turkey-Greece-Italy gas pipeline and the
Burgas-Alexandropoulos oil pipeline projects underway, rumor
has it that Sioufas (a close and reliable advisor to the PM)
may become Parliamentary majority leader for the next ND
government. If that happened, it is not clear whether his
extremely capable Secretary General Nikolas Stefanou would
follow Sioufas to the parliament or rise to a ministerial
position himself.


11. (S) We do expect changes in the Merchant Marine Ministry.
Current Minister Manolis Kefalogiannis has a reputation for
alienating others in the GOG (and in the maritime industry)
and for not getting things done. His departure would likely
help USG efforts to support the transfer of the last floating
Liberty Ship to be used in a maritime museum in Piraeus. We
also expect that Georgios Zorbas, President of the Financial
Intelligence Unit (set up only one year ago) will, after a
decent interval, be sacked, due to his penchant for taking
literally his mandate to run the FIU as an independent agency
and his overly prosecutorial demeanor. He ran into a
firestorm of criticism in late August over his handling of

the pension-fund bond scandal, having released a report to
the prosecuting magistrate that he apparently had not shared
with the board of directors of the FIU. The report's
allusions to bribery of ruling party officials was leaked to
the press just as the PM announced early elections.
COUNTRYMAN