Greek PM reshuffles cabinet after worse than expected EU vote result

By Renee Maltezou and Angeliki Koutantou

ATHENS (Reuters) - Greek Prime Minister Kyriakos Mitsotakis reshuffled his cabinet on Friday to boost the government's battle with a cost-of-living crisis, but kept his foreign and finance ministers in place to show policy continuity.

The changes were announced after Mitsotakis' centre-right party performed worse than expected in Sunday's election to the European Parliament.

Although he kept Finance Minister Kostis Hatzidakis and Foreign Affairs Minister George Gerapetritis, Mitsotakis named Takis Theodorikakos as development minister and moved Niki Kerameus from the interior ministry to the labour ministry. Former defence minister Nikos Papanagiotopoulos was appointed migration minister.

Mitsotakis' New Democracy party, which has led Greece since 2019, came first in Sunday's election with 28.3% of the vote. But it missed a 33% target set by Mitsotakis and was below the 40% the party received in a national election in June 2023.

A record 59% of registered voters abstained in the EU vote.

Despite an economic recovery after a decade of pain, wages in Greece are still below the European Union average.

Mitsotakis has attributed the "protest" vote to the high cost of living. The conservative leader has said his government will try within budget limits to combat spiralling prices of food products, but has ruled out a sales tax cut.

"Rising prices remain a top concern for Greek people as recent polls showed. So replacing the development minister was a corrective move he (Mitsotakis) had to take," political analyst Apostolos Pistolas said.

Mitsotakis has also promised to reduce employers' social security contributions to encourage businesses to hire more workers and fight the unemployment rate, which has dropped in recent years but is still double the euro-zone average.

Mitsotakis has ruled out a snap election. His term ends in 2027.

He said this week a landmark reform allowing same-sex marriage had backfired as it drew away traditional New Democracy voters away, but that he did not plan to reverse it.

Papanagiotopoulos' appointment as migration minister was described by political analysts as a turn to a more right-wing policy.

Greece has been a favoured gateway to the EU for migrants and refugees from the Middle East, Africa and Asia since 2015 when nearly 1 million people landed on its islands.

(Additional reporting Lefteris Papadimas; Editing by Alison Williams, Ros Russell and Timothy Heritage)