Greek PM Reshuffles Cabinet

Greek Prime Minister George Papandreou promoted former Defense Minister Evangelos Venizelos as new Finance Minister in a cabinet reshuffle announced on Friday morning.

Venizelos, who replaces George Papaconstantinou, faces the uneasy task of coping with the Balkan country's severe debt crisis. Papaconstantinou became largely unpopular in the ruling PASOC party after an 18-month austerity drive failed to pull the economy out of recession.

Papaconstantinou has been appointed as Environment Minister. Papandreou also named a new Foreign Minister, 49-year-old Stavros Lambrinidis, while Former Deputy Defense Minister Panos Beglitis was promoted to full minister.

The European Union's top economic official said on Thursday he had reached a deal with the International Monetary Fund to avoid a Greek default, the Financial Times reported.

Olli Rehn, the EU's economic commissioner, said the IMF deal would allow international lenders to disburse EUR 12 B to Greece even without an agreement on a new EUR 120 B bail-out for Athens, avoiding a default that would have come as early as next month.