Greece faces more woes: Finance minister resigns

A leadership vacuum loomed for Greece as the designated finance minister resigned for health reasons Monday just three days after he was rushed to the hospital and before he even had time to be sworn in.

Prime Minister Antonis Samaras accepted the resignation of Vassilis Rapanos only hours after being discharged from another hospital himself following eye surgery to repair a detached retina over the weekend.

The health problems of Greece's five-day-old government had already forced the country's international debt inspectors to postpone their Monday visit to Athens and prompted Germany to warn that a European Union summit later this week would be unlikely to produce any major decisions on Greece.

Rapanos, chairman of the National Bank of Greece, had been named finance minister last week in the country's new three-party coalition government but became ill before he could be sworn in Friday. The Hygeia Hospital said his condition was improving and he was expected to be discharged Tuesday, but it did not elaborate on what he was suffering from.

"The recent incident that led to my admission to a hospital shows that my health problem has not been fully overcome," Rapanos said in his letter of resignation, released by Samaras' office. Talks with his doctors led him to determine that "my health situation, for the time being, is not such that would allow me to fully and efficiently exercise my duties."

It was unclear when a replacement would be named. As he has not been sworn in, outgoing Finance Minister Giorgos Zanias, a key negotiator for Greece's international bailout before assuming the post in a one-month caretaker government, still holds the title.

Samaras himself will have to remain at home for several days and will be unable to travel to the EU summit in Brussels on Thursday and Friday, although he can have meetings, doctors said. He was to speak by telephone later Monday with President Barack Obama.

The EU summit comes just a week after Greece's new coalition government was formed, following months of political turmoil and two inconclusive elections. It was to have been a key test of Athens' hopes of renegotiating some of the austerity measures it has agreed to in return for billions of euros in rescue loans from the International Monetary Fund and other European Union nations that use the joint euro currency.

But before the summit, Greece's debt inspectors, known as the troika — representatives from the European Commission, the European Central Bank and the IMF — were to visit Athens and give their professional assessment of Greece's financial situation. But that visit was postponed indefinitely until Samaras and Rapanos could recover.

Without the troika report on Greece's progress on the economic reforms demanded by creditors, Germany said it would be premature to expect any new decisions this week.

"The troika needs to go to Athens, they need to assess the status of the program, then they need to brief the eurozone and IMF leadership," said Steffen Seibert, spokesman for German Chancellor Angela Merkel. "On the basis of this assessment, one can talk about necessary updating of the program — that is the road map that everyone in Europe is following and that's why we don't expect any sort of a resolution on Greece at the EU council."

With mounting fears that Greece's problems are not getting resolved soon, the Athens Stock Exchange general price index closed 6.84 percent down Monday.

Greece will still be present at the EU summit. It will send a delegation including Zanias that will be led by country's president, 83-year-old Karolos Papoulias, the government announced Monday, overturning a Sunday decision to have the delegation led by its foreign minister. While the Greek presidency is largely a ceremonial post, Papoulias' presence adheres to EU regulations about summits.

European Commission spokesman Amadeu Altafaj Tardio said debt inspectors will head to Greece "as soon as possible."

After years of profligate government spending and false accounting, Greece has been existing on bailout loans since May 2010. It is on its second international bailout — €240 billion ($300 billion) in all — and its inability resolve its debt woes have led to questions about the financial health of the entire 17-nation eurozone.

(Published by Bloomberg Businessweek, June 25 - 2012)