Greek PM ousts rebels as bailout plan gathers momentum

ATHENS - Greek PM Alexis Tsipras has axed ministers who had rebelled over draconian bailout terms, putting his house in order before a fresh round of tough negotiations with creditors including European Union (EU) hawk Germany, which greenlit the deal.

The most prominent victim was energy minister Panagiotis Lafazanis, the head of a hardline faction within Mr Tsipras's party that has demanded the country leave the eurozone. His ally, the deputy minister of defence, was also axed.

Friday's reshuffle came just hours after the EU approved a short-term 7.16-billion-euro (S$10.6 billion) loan to Greece, allowing it to make huge payments as early as next week to its creditors while a new eurozone debt bailout is being hammered out.

It also followed a crucial green light from German lawmakers for Chancellor Angela Merkel to begin negotiations on a new 86-billion-euro bailout package.

The loan, to be given through the EFSM rescue fund, will allow Greece to make a critical payment of 4.2 billion euros due Monday to the European Central Bank needed to keep the country in the euro.

The Greek prime minister fuelled hopes of a fresh boost to the negotiations after stamping down on a lawmaker mutiny in his radical left Syriza party which had weakened the government and raised fears of early elections.

The reshuffle, which saw nine changes overall, replaced the junior ministers of finance and foreign affairs, who had resigned over the bailout deal. The new members of the cabinet were set to be sworn in at a ceremony on Saturday.

Ms Merkel, who like Mr Tsipras, faced rebels in her own party ranks, told German lawmakers that the deal with Athens was the last chance to prevent "chaos" in the crisis-hit country.

In the end she won broad approval from the Bundestag, where her "grand coalition" commands an overwhelming majority, with 439 voting in favour, 119 against and 40 abstentions.