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New ministers in Greek Prime Minister Alexis Tsipras' government were sworn in on Saturday after a reshuffle expelled dissidents from his cabinet and began a new phase of negotiations for a third bailout package.
Tsipras sacked hardline former Energy Minister Panagiotis Lafazanis and two deputy ministers on Friday in a change that marked a split with the main leftist faction in the ruling Syriza party following a rebellion over the bailout terms.
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Panos Skourletis, a close Tsipras ally who left the labour ministry to take over the vital energy portfolio, said the reshuffle marked "an adjustment by the government to a new reality".
The deal, approved with the support of opposition parties on Thursday after 39 Syriza rebels withheld their backing, agrees a painful mix of tax hikes, spending curbs and pension cuts as well as a rollback of collective bargaining agreements.
In addition, euro 50 billion ($54.14 billion) in public assets are to be placed in a special privatisation fund to act as collateral for loans of up to euro 86 billion that must now be agreed with European partners.
In place of the rebels, Tsipras named allies of his own or his junior coalition partners, the right-wing Independent Greeks party, aiming to seal the bailout accord with European partners over the next few weeks before likely new elections. "Our aim is to negotiate hard for the terms of the agreement, not just to seal it, but on how it will be implemented. There are many vague terms in the text," said newly-appointed Labour Minister George Katrougalos.
He said the government, elected in January on an anti-austerity platform, would fight for an agreement that was "socially just" and dismissed suggestions that it would have to take on the powerful labour unions and risk street protests. "The Left is with demonstrations. The Left wants the people on the streets," he said.
Acceptance of the tough bailout terms marked a turnaround for Tsipras after months of acrimonious talks and a referendum that resoundingly rejected a less stringent deal proposed by the lenders. But opinion polls suggest the prime minister's own popularity remains high.
A poll published on Saturday in the leftwing Efimerida Ton Syntaknon newspaper suggested Syriza would get 42.5 per cent of the vote if an election were held now, almost double conservative New Democracy's 21.5 per cent.
In addition, 70 per cent said they would prefer to accept the bailout deal if it kept Greece in the euro. Negotiations on the package are set to begin from next week after parliaments in Germany and other European countries gave their asset and European authorities approved emergency funding that should enable Athens to avoid defaulting on a euro 3.5 billion debt repayment due on Monday.
The European Central Bank has also agreed to release euro 900 million in emergency credit next week to the stricken Greek banking sector. But banks remain closed until at least Sunday and it is still unclear whether they will be able to reopen immediately.
Greek banks to re-open Monday
Greek banks will re-open on Monday with slightly relaxed withdrawal limits but bans on foreign transfers and other capital controls remain. The euro 60 daily withdrawal limit set when the banks were closed on June 29 is adjusted to allow customers to take out up to euro 420 a week, while holders of Greek bank cards will be able to use them to make payments while they are out of the country. But bans on moving money out of Greece remain in place along with restrictions on opening new accounts.
