New PM promises Greeks “time to breathe”

ATHENS, Greece — Greece’s new Socialist prime minister took charge Wednesday, promising Greeks “time to breathe” before they face the realities of a rapidly cooling economy compromised by high state spending and a soaring public debt.

Prime Minister George Papandreou, 57, has announced a 100-day action plan to address the country’s economic woes with a stimulus package of up to €3 billion ($4.42 billion), tax reforms and infrastructure investment.

“We won’t change Greece in 100 days,” Papandreou told his first Cabinet meeting after its members were formally sworn in. “But we will give the country enough time to breathe, to gather its forces for the big leap forward it must take.”

His PASOK party won a crushing weekend electoral victory over the scandal-battered conservatives, returning after five years in opposition with a comfortable 160 seats in the 300-member Parliament.

Orthodox Church leader Archbishop Ieronymos of Athens swore in the new government during a religious ceremony attended by President Karolos Papoulias.

The 36-strong new government walked to and from the presidential mansion, cheered by hundreds of people lining the street and jostling to shake hands with Papandreou.

As well as being prime minister, Papandreou will be responsible for foreign policy — a position he held in the last Socialist government.

A son and grandson of Greek prime ministers, Papandreou has merged several existing portfolios, created a new ministry for the environment and given key posts to women, five of whom will hold ministerial positions.

Speaking to his Cabinet, the U.S.-born prime minister pledged to crack down on corruption, increase government accountability and promote environmentally friendly development.

“There will be transparency everywhere, in all decisions regarding management of funds — down to the last euro,” Papandreou said. “Citizens have the right to know how their taxes are spent.

“We must restore order to the public finances, slash state waste, support the less well-off … (and) quickly revive the economy.”

Papandreou has promised above-inflation salary rises for civil servants, and says he will boost state revenues by increasing taxes on the rich and fighting widespread tax evasion. A major challenge will be to reduce the public debt, expected to exceed 100 percent of economic output in 2008, and a budget deficit that could reach 10 percent of GDP.

Political analyst Giorgos Kyrtsos said the Socialists’ landslide victory would ensure them enough breathing space to push forward their reform program.

“The main opposition party is weakened, so politically there will be a period of grace,” said Kyrtsos, publisher of the City Press and Free Sunday newspapers. “The campaign agenda was tough, so nobody expects easy solutions, and the people have shown they are willing to invest in a new effort.”