Greece's new prime minister on Tuesday named long-time adviser Louka Katseli economy minister and socialist party spokesman George Papaconstantinou in the finance position.

Papaconstantinou and Katseli will need to tackle an economy which has slowed sharply after years of 4 percent growth and is now on the verge of recession, burdened by a ballooning deficit topping 6 percent of GDP and record youth unemployment.

To take on this task, Prime Minister George Papandreou appointed a mix of senior members of his party like Katseli, who served as economic adviser to his father Andreas when he was prime minister, and a younger generation with international experience such as EU lawmaker Papaconstantinou.

One of their first challenges will be to draft a 2010 budget by November and convince Brussels to give Greece more time to bring its deficit under the euro zone's 3 percent of GDP cap.

"It's a team with the right academic credentials to do the job, despite the difficulties," Livanios said.

Fight crisis

Papandreou split the ministry of national economy and finance in two in a move meant to signal that fighting the crisis was the government's top priority, analysts said.

"It remains to be seen if it is going to be an effective tool," said Costas Panagopoulos, manager of pollster ALCO.

Papandreou himself took the foreign minister portfolio, a post he has held before. Analysts expect little change in the foreign policy of the EU and NATO member, which backs Turkey's EU entry.

Papandreou's PASOK party won Sunday's election with a comfortable majority, gaining 160 seats out of 300 in parliament which should make it easier for the new government to implement a 3 billion euro ($4.42 billion) stimulus package to jump start the economy.

It will need to convince markets it can do so without worsening what is already the euro zone's second largest debt as a percentage of GDP, after Italy.

Reuters