- Associated Press - Monday, June 25, 2012

ATHENS (AP) — Greece‘s designated finance minister stepped down Monday after being rushed to the hospital on Friday, the prime minister’s office said.

Vassilis Rapanos, chairman of the National Bank of Greece, was named finance minister last week in the country’s new three-party coalition government. But he was taken ill before he could be sworn in on Friday and has been in hospital ever since.

Mr. Rapanos sent a letter of resignation to Prime Minister Antonis Samaras, and it was accepted.

The startling development came as Germany tamped down expectations that this week’s European Union summit would emerge with any significant action on Greece as the debt-strapped nation’s two key politicians struggled with health problems.

Mr. Samaras himself was released from the hospital Monday after undergoing eye surgery to repair a detached retina over the weekend, but he will have to stay home for several days and won’t be able to travel to Brussels for the EU summit. He was still planning to speak by telephone later Monday with President Obama.

The EU summit Thursday and Friday 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 EU nations that use the joint euro currency.

It was to have been preceded by a visit to Athens starting Monday by Greece‘s debt inspectors, known as the Troika — representatives from the European Commission, the European Central Bank and the IMF. But that visit was postponed until Mr. Samaras and Mr. Rapanos could recover.

Mr. Rapanos, meanwhile, remained in the hospital after being admitted Friday complaining of severe abdominal pain, dizziness and nausea. The hospital said he would be released on Tuesday, but it did not elaborate.

Without the Troika report on Greece‘s progress in economic reforms required by its international bailout, Germany said it would be premature to expect any new decisions this week. Mr. Samaras has been pressing Greece‘s creditors to revise the bailout deal, which is despised by many ordinary Greeks.

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

Greece still will be represented at the EU summit, sending a delegation with outgoing Finance Minister Giorgos Zanias, one of the key negotiators in Greece‘s bailout agreement. As Mr. Rapanos fell ill before he could be sworn in, Mr. Zanias still holds the title.

And the delegation will be led by the country’s president, 83-year-old Karolos Papoulias, the government announced Monday. While the presidency in Greece is a largely ceremonial post, his presence would adhere to EU regulations about summits.

It was unclear when the postponed Troika visit would take place.

“First, our concern is for the health of the prime minister and finance minister,” European Commission spokesman Amadeu Altafaj Tardio said in Brussels, adding that debt inspectors would head to Greece “as soon as possible.”

Mr. Samaras‘ government — comprising his New Democracy conservatives; their long-time socialist rivals, PASOK; and the small Democratic Left party — has issued a policy statement outlining changes it would like to make to the terms of its international bailout. Those include repealing certain tax increases, freezing public-sector layoffs and extending by two years the mid-2014 deadline for tough austerity measures.

Whether Greece can amend the terms of its loan agreement will depend on how the proposals are viewed by its international creditors. Germany, the largest single contributor to eurozone bailouts, has repeatedly said Athens must stick to its austerity pledges.

“One thing is clear,” German Foreign Minister Guido Westerwelle said from Luxembourg. “We cannot allow everything to be negotiated again. We can also not allow discounts to be granted. What has been decided upon stands. That the (Greek) election campaigns have cost time is obvious. That’s the situation, and we have to deal with it. But the fact remains that the agreements must be implemented.”

Mr. Seibert also stressed that Greece must stick to its commitments.

“A program has been agreed upon, a program goes for every government, no matter if it’s a new government, and the program is the best way to see Greece return to economic health,” he said.

In Brussels, Mr. Tardio also stressed that “Greece has to face its financial obligations,” adding that before any further funds can be disbursed, “there has to be a thorough analysis.”

“It’s no secret that there have been delays in several areas of implementation,” he added.

The latest figures released by the Greek Finance Ministry on Monday showed that Greece‘s budget deficit for the first five months of the year was better than expected, standing at 10.87 billion euros ($13.63 billion) instead of the target of 12.89 billion euros ($16.17 billion) on a modified cash basis.

Revenue, however, was below target, with the state budget net revenue standing at 19.67 billion euros ($24.56 billion), 926 million euros ($1.15 billion) short of the targeted 20.6 billion euros ($25.73 billion), due in part to lower domestic consumer demand and lower tax revenues.

The ministry said, “This revenue shortfall was more than compensated for by the savings in State Budget expenditures for the first five months of 2012.”

David Rising in Berlin and Toby Sterling in Brussels contributed to this article.

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