New Greek PM picks his team

Athens (Reuter) - Greece's new Prime Minister yesterday unveiled his new cabinet, making Theodoros Pangalos, a controversial figure, his Foreign Minister.

Costas Simitis kept the Economy Minister, Yannos Papandoniou, and the Finance Minister, Alexandros Papadopoulos, but brought in several prominent party reformers, a spokesman announced.

The most controversial appointment was the new Foreign Minister. Theodoros Pangalos publicly insulted Germany and Italy when Greece last held the European Union presidency. In 1993 he likened Germany to "a giant with bestial force and a child's brain". He left the government of the former prime minister, Andreas Papandreou, and joined Mr Simitis's group of party reformers.

Though Mr Pangalos's confrontational style set teeth on edge while Greece held the EU presidency, he is described as more committed to European-style social democracy than Mr Papandreou.

Mr Simitis, 59, was chosen asPrime Minister last week by the Socialist group in parliament, replacing Mr Papandreou who has been in hospital since 20 November. Mr Simitis's new cabinet appeared to be a mix of Papandreou loyalists and members of his own reform camp.

Mr Simitis wants more money spent on development, more privatisation and greater compliance with EU standards.

He is expected to make big changes in the major ministries, state corporations and banks, but to keep some Papandreou traditionalists, to avoid divisions in the Panhellenic Socialist Movement (Pasok) party.

He is expected to take a more pragmatic approach toGreece's fragile relations with its Balkan neighbours, Albania and the former Yugoslav republic of Macedonia.