Lucas Papademos, Greece's prime minister, is expected to reshuffle his caretaker cabinet on Monday after winning parliamentary approval for an austerity package, against a backdrop of violent anti-reform protests in Athens.
Mr Papademos is due to replace six cabinet ministers and undersecretaries who resigned at the weekend in protest against the package of €3.3 billion in spending cuts this year. Another 40 backbenchers from the socialist and conservative parties, both participating in a national unity government, also voted against the package, claiming it would mean handing over sovereignty to Brussels and would prolong a deep recession now in its fifth year.
The EU gave the fragile ruling coalition until Wednesday to specify how the budget savings would be achieved, warning that the consequences of failure would be “devastating”.
But Marianne Kothe, a spokeswoman for the German finance ministry, said the ministers would not make a final decision on the second aid package this week. She said the bond swap agreement must first be finalised and that EU finance ministers would then focus on measures “necessary for the second Greek package’’.
Some eurozone members are calling for the bailout funds to be placed in an escrow account and disbursed as Greece achieves fiscal and structural reform benchmarks over the next three years.
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