Greek government pledges to safeguard euro membership

Athens: Greece's new conservative-led coalition government on Thursday pledged to try and revise the country's austerity commitments to its creditors, but insisted that would not endanger ties with the rest of Europe or Greek use of the euro currency.

The day-old, three-party coalition under Prime Minister Antonis Samaras - Greece's fourth in eight months - issued a policy statement saying it would seek to serve its full four-year mandate. It also named a 38-member Cabinet that includes prominent banker Vassilis Rapanos, chairman of the National Bank of Greece, in the crucial post of finance minister.

The government's "aim is to tackle the crisis, to open the road to development and to revise the terms of the loan agreement without jeopardizing the country's European course or its presence in the euro," it said.

At the same time, the coalition said, Greece will continue to reduce its fiscal deficit, control its debt and implement structural reforms.

Greece depends on international rescue loans, granted on condition of a harsh austerity program that has forced deep cuts in incomes and public services, amid soaring unemployment and a deep recession now in its fifth year.

After more than six weeks of political deadlock, the formation of a long-term government with broad parliamentary support has soothed global markets and Greece's European partners.

"Today, all eyes are on us, both inside and outside Greece. They expect much from us," Mr Samaras said during his first Cabinet meeting. "For the first time in some time, we have built hope and we mustn't betray those expectations that have been invested in us."

His new government, he said, "has no period of grace. It must show work from the first minute, and that is what we will do."

Mr Samaras announced he was cutting all his ministers' salaries by 30 per cent immediately, and would limit the use of state cars by government members to the absolute minimum. He also stressed this was the only time he would allow a Cabinet meeting to be televised.

"I know all of you, all of us, have the best intentions. But I'm not interested in intentions. I'm interested in the work and the result," he told the Cabinet.

Many had feared a victory in Sunday's national election by anti-austerity parties could have prompted a disastrous confrontation with Greece's creditors, ending the flow of bailout funds and eventually forcing the country out of the 17-member eurozone.

In Brussels, European Commission President Jose Manuel Barroso welcomed the formation of Greece's new Cabinet, saying the EU will continue to work with Athens to bring back growth and job creation.

"I am particularly reassured that the new administration will count on ample and broad-based parliamentary support," he said in a statement. "I believe that this sends a clear signal of Greece's determination to honour its commitments and stay in the euro."

Mr Samaras' New Democracy party narrowly beat the anti-austerity Syriza radical left party in Sunday's election, but didn't win enough seats in Parliament to govern alone. After three days of talks, it formed a coalition with the third-place Socialists and the smaller Democratic Left party.

Mr Samaras, a 61-year-old US-educated economist, campaigned on pledges to boost growth, cut taxes, seek extended deadlines to implement the country's pledges for more austerity, and raise the incomes of low earners, large families, police and fighter pilots.

"I expect the party to keep its word and do what is said it will do," said Athens resident Leonidas Tiniakos, 58. "Samaras and the other parties which support the government have said that some parts of the bailout have to change. But it's the actions that matter, not the words."

Mr Tiniakos, who said he voted for New Democracy, added that the fact Greece now has a government "gives me a little hope."

Kyriakos Tzaferos, an out-of-work civil engineer now working as a real estate agent, said the government deal could help restore market stability.

"Probably the economy will try to pick up again and some money will be pumped into the market," he said. "Otherwise, if there's no money in the economy, there's going to be no improvement into what you get in your pocket at the end of the day."

Salaries have been deeply cut over the past two-and-a-half  years in the shrinking private job market and the large civil service. Still, civil servants have been spared from the kind of layoffs that have left more than one in five Greek workers jobless.

Pensions have dwindled and taxes have repeatedly been raised, although constant pledges to overhaul an inefficient tax system that primarily targets salaried employees and pensioners have failed to deliver.

The new ministers and their deputies were sworn in shortly before the Cabinet meeting. Mr Rapanos will be sworn in at a later date so outgoing Finance Minister Giorgos Zanias can represent Greece at Thursday's meeting of eurozone finance ministers in Luxembourg.

Former diplomat Dimitris Avramopoulos was appointed foreign minister, while former conservative development minister Costis Hadzidakis was named minister of "development, competitiveness, infrastructure, transport and networks."

Stelios Karabasakis, an IT student doing his national service in the army, said the new Cabinet failed to impress him.

"Basically it's a mix of people we've seen before and which the people of Greece don't trust a lot," he said. "And ... about the new names, we'll have to wait and see."

Greek stocks rallied for a sixth straight session, closing the day up 1.83 per cent. The stock market has gained nearly 10 per cent in the past week, but has still lost nearly 90 per cent of its value over the past five years.