GREEK CABINET RESHUFFLE: CONTINUITY IN FM AND

C O N F I D E N T I A L SECTION 01 OF 02 ATHENS 000017

SIPDIS

E.O. 12958: DECL: 01/07/2019
TAGS: PGOV PREL ECON GR
SUBJECT: GREEK CABINET RESHUFFLE: CONTINUITY IN FM AND
DEFENSE, BUT CHANGES IN SECURITY, ENERGY, AND ECONOMY

Classified By: AMBASSADOR DANIEL SPECKHARD. REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: On January 7, PM Karamanlis announced a
fairly widespread Cabinet reshuffle. FM Bakoyannis and
DefMin Meimarakis remain, but key personnel at the various
economic ministries were replaced or shifted, including the
Minister of National Economy and Finance and the Minister of
Development (in charge of energy). On the security side,
former CHOD and alternate Minister of Public Order Chinofotis
was fired. The Cabinet changes appeared designed to address
widespread criticism of the government's handling of major
issues, but it is unclear at this point to what extent the
personnel changes will result in any real changes in policy
or even blunt criticism of the government. END SUMMARY.

MUSICAL CHAIRS
--------------


2. (SBU) On January 7, PM Karamanlis announced a fairly
widespread Cabinet reshuffle, though in many cases trusted
ministers were shifted between jobs and only a few top
officials were out of government altogether. Newer faces
were more evident at the deputy minister level. No changes
were announced for the Ministry of National Defense. At the
Foreign Ministry, Bakoyannis remains as Minister, but Deputy
Minister Doukas, who was heavily implicated in the
Vatopaidion scandal, was replaced by up-and-coming MP and
former Chairman of the Parliamentary Defense and Foreign
Affairs Committee Miltiades Varvitsiotes.


3. (SBU) On the security side, alternate Minister of Public
Order and former CHOD Chinofotis was ousted, though his boss
Pavlopoulos will remain as Minister of Interior. Also at
Interior, a new deputy minister of Mass Media, Kostas
Gioulekas, an MP and former journalist from Thessaloniki, was
appointed. The Ministry of Justice will now be headed by
Nikos Dendias, a lawyer from Corfu elected an ND MP in 2004
who was also deputy chairman of the Parliamentary committee
that investigated the Vatopaidion land-swap scandal.


4. (SBU) Some of the most important replacements took place
in the economic ministries. Minister of the National Economy
and Finance Alogoskoufis is out, being replaced by one of his
deputies, Yannis Papathanassiou. Minister of Deve$!Q%%"QQQ
B!,)!1 Q!3 Q%Q$aced by former Minister !" DQ!&Q@!QQ a"$
A!%mEbications Kostis Hadjid!+)Q& EQ"!QQ$Q !"E$Q!ation
Stylianides shift% be headed by former Minister of Justice Sotiris
Hadjigakis. Former FM Antonis Samaras returned to become the
new Minister of Culture. Finally, while former Minister of
State Rousopoulos' title disappeared with him a few weeks
ago, the solid Evangelis Antonaros was formally named as the
PM's spokesperson.

COMMENT: WHAT IT ALL MEANS
--------------


5. (C) Karamanlis' Cabinet changes appeared designed to
address widespread criticism of his government's handling of
the weakening economy, the Vatopaidion land-swap scandal, and
the recent riots. It is unclear at this point, however, to
what extent the personnel changes will result in any real
changes in policy or whether they will even meet public
demand for action.


6. (C) Public sentiment had turned against Minister of
National Economy and Finance Alogoskoufis over pension
reforms, spikes in consumer prices, tax hikes, and a general
perception that he and his ministry had done little to help
the average Greek. His replacement, former Deputy Minister
Papathanasiou, will have his work cut out for him as the
Greek economy's growth rate slows as a result of the global
financial crisis and Greece has trouble meeting its
optimistic budget projections. At the Ministry of
Development, Kostas Hatzidakis comes over from the Ministry
of Transport and Communication with a solid reputation as an
effective manager. He has no experience in the key sector of
energy, however, and it is not clear what the change means
for the future of Greece's natural gas plans.


7. (C) The replacement of Chinofotis at the Ministry of
Public Order was likely meant to deflect criticism of the
GOG's handling of the violence and demonstrations. At
Justice, Hadjigakis' replacement Dendias is highly regarded,
with a positive, can-do attitude that could help us move

ATHENS 00000017 002 OF 002


along on key issues, such as trafficking in persons, visa
waiver, and the ratification of the U.S.-EU Extradition and
Mutual Legal Assistance agreements, which has been stuck at
Justice despite our many pushes.


8. (C) The emergence of the generally pro-U.S. Antonis
Samaras from the political wilderness is clearly designed as
a way to re-introduce him to an ND government in preparation
for bigger things later. He would be a much better fit at
one of the economic ministries or the Foreign Ministry, which
he once headed, but could probably not work under or with
Bakoyannis, whose father's government fell to Pasok in 1993
after Samaras left ND to form a new minor party over
dissatisfaction with what Samaras thought was Mitsotakis'
softness toward Macedonia.
SPECKHARD