Greece's Tsipras may form Cabinet without Tsakalotos as finance minister

Alexis Tsipras signs documents following his swearing ceremony as Greece's new Prime Minister at the presidential palace in Athens, Greece, on Sept 21, 2015.
Alexis Tsipras signs documents following his swearing ceremony as Greece's new Prime Minister at the presidential palace in Athens, Greece, on Sept 21, 2015. PHOTO: EPA

ATHENS (REUTERS) - Newly sworn-in Greek Prime Minister Alexis Tsipras is hoping to re-appoint Euclid Tsakalotos as his finance minister on Tuesday but is struggling to persuade him to stay on in his post.

State radio reported that Tsakalotos, who impressed his euro zone counterparts for his constructive approach in bailout negotiations after hard-line leftist Yanis Varoufakis resigned, was reluctant to take the job again.

It gave no reason, but Tsakalotos, a Dutch-born British-educated Marxist economist, is a member of the so-calle "53+" faction in Syriza, some of whose members recently expressed concerns the party was moving away from core leftist values in favour of holding on to power.

An alternative could be George Chouliarakis, who has been finance minister in the caretaker government put in place during Greece's election campaign.

Chouliarakis was also a leading member of the bailout negotiating team that agreed terms with the euro zone. He is a technocrat, however, and Tsipras is known to want a politician at the helm of the finance ministry.

Tsipras is expected to announce his Cabinet later on Tuesday.

Its two main tasks will be to ensure that the 86 billion euro (S$136 billion) bailout given by the euro zone in exchange for deep economic reforms does not go off track, and to handle Greece's huge refugee problem.

Of the record 430,000 refugees and migrants who have made the journey across the Mediterranean to Europe so far this year, 309,000 have arrived via Greece, according to the International Organisation for Migration.

Many of Greece's partners, particularly in eastern Europe, want Greece to stop allowing the refugees to pass north on a trek to Germany and other wealthy northern countries.

But it is the implementation of the bailout - agreed after months of bitter negotiations in which Tsipras railed against austerity being imposed on Greece - that will be the government's overwhelming task.

Factions like "53+" notwithstanding, Tsipras' re-election on Sunday made his party the dominant force in Greece with his harshest hard-left rebels failing to make it into parliament.

"Alexis Tsipras now has the chance to correct the mistakes of his (first) term," centre-left newspaper Ta Nea said in an editorial.

"His first Cabinet was marked by Syriza's big appointments, such as Yanis Varoufakis, which had particularly bad results. It was also marked by a need to preserve inner party balances which brought the hard left ... lawmakers to important ministerial posts."

If Tsakalotos declined to be re-appointed - party officials have said previously he was "likely" to be the choice - it would be an early blow to Tsipras, but not necessarily a major one. The radio said even if Tsakalotos does not take the job he could still lead negotiations with the euro zone.

Tsipras is also considering whether to create a bailout commission, a high-level group to back up the finance ministry. Either Tsakalotos or Chouliarakis could end up running it.