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By ALKMAN GRANITSAS, COSTAS PARIS and MATINA STEVIS

Associated Press

Athens residents, struggling with the country’s debt crisis, line up to receive free vegetables Wednesday.

ATHENS—Greek conservative leader Antonis Samaras was sworn in as prime minister Wednesday at the head of a three-party coalition that is tasked with carrying out the country’s harsh European-led bailout.

In remarks shortly after his swearing-in ceremony, Mr. Samaras said his new cabinet—which is expected to be sworn in Thursday—would immediately get to work tackling Greece’s economic crisis that has pushed the economy into a deep recession and sent jobless rates to record highs.

“With God’s help, we will do whatever is in our hands so our people can emerge faster from the crisis,” he said. “[Thursday] morning I will ask of the new government that will be formed, hard work so we can give a tangible hope to our people.”

The agreement to form a coalition followed closely fought June 17 elections in Greece—the second vote in as many months—that were widely seen as a de facto referendum on the country’s bailout and, by extension, Greece’s future inside the euro zone.

Although New Democracy won the most votes in the elections, it didn’t control enough seats to govern on its own and had to seek coalition partners to control a majority in Greece’s 300-member Parliament. Combined with the forces of the Socialist and the small Democratic Left parties, the coalition will hold 179 seats.

But on the streets of Athens, there are few who think the new government will be able to make much of a difference in their daily lives.

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Agence France-Presse/Getty Images

New Democracy party leader, Antonis Samaras, left, meets with with Greek President Carolos Papoulias at the presidential palace in central Athens on Wednesday.

Katerina Androulaki, a 22-year-old university student, is fretting about her job prospects when she graduates and sees little hope for the future—with good reason: More than 50% of people in her age group are jobless. Her father, the family’s principal breadwinner, also recently lost his job.

Ms. Androulaki didn’t vote in Sunday’s elections, expecting little from politicians of any party.

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Reuters

Socialist Pasok party head Evangelos Venizelos, left, at a meeting at the party’s headquarters in Athens.

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“The election was a farce among politicians that only want to be in power. They can’t do anything to make it better for the people,” she said.

The new government faces many hurdles, with a central administration threatened by a cash crunch within weeks, an economy in free fall and an angry public exhausted by two years of austerity measures.

At the same time, it must work to bring Greece’s derailed fiscal targets back on track after weeks of political paralysis. The new government must find €11.6 billion ($14.72 billion) of new austerity measures the country’s creditors demand, which could further inflame public opinion.

“Nothing has been solved and more misery will come with the new measures,” said Grigoris Manolis, a 46-year-old street vendor as he stood over his street cart of mobile-phone accessories on Athens’s main shopping street. He has seen his sales drop more than a third in the past year.

The new government also faces strident opposition from the Syriza party, which finished a strong second on Sunday. The leftist party campaigned against Greece’s latest €173 billion bailout and the austerity terms that come with it.

Syriza said the new government represented a continuation of the austerity policies, and vowed to support popular resistance to those measures in the future.

“[Syriza] will stand by the side of all those who have suffered from the policies that have been implemented and will be at the forefront of the social battles in the next phase,” the party said.

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Although the new government hasn’t yet been sworn in, Mr. Samaras has already named Vasilios Rapanos—current chairman of the National Bank of Greece SA, the country’s largest lender—as finance minister.

Mr. Rapanos, born on the island of Kos in 1947, is an economist by training and has served in various government positions before leading the bank. Before his appointment to NBG in late 2009, Mr. Rapanos was a research associate at the Foundation for Economic and Industrial Research, a business think tank. He also served as the chairman of the Council of Economic Advisers at the Ministry of Economy and Finance between 2000 and 2004.

He succeeds interim finance minister George Zanias, who has served in the Finance Ministry since the start of the Greek crisis in late 2009. In an effort to ensure continuity in Greece’s economic program, Mr. Zanias will travel to a meeting of euro-zone finance ministers in Luxembourg Thursday, where Greece’s much-delayed overhauls will be a priority item.

The new government plans to ask other euro-zone countries for an extra two years to meet Greece’s fiscal targets in an effort to ease the pain of Greece’s adjustment program, while the three parties have also agreed among themselves that there should be no further cuts in pensions and salaries, and that the new government should try and ease some of the financial burden on over-indebted households.

But an extension in the fiscal targets will mean that Greece’s euro-zone partners—which are financing the bulk of the latest bailout—will have to find another €16 billion to cover the country’s financing needs.

The first test of whether other European capitals, and particularly Berlin, will agree to an extension comes at Thursday’s meeting of finance ministers followed, a day later, by a full-blown meeting of all 27 European Union finance ministers.

“The task of the government is really difficult, but it’s effectiveness mainly depends on the understanding of Greece’s European peers,” said Ilias Nikolakopoulos, a professor of political science at the University of Athens. “Greeks are waiting for a relaxation of the program and a turnaround in the recession, but they are not expecting a recovery right away.”

—Nektaria Stamouli and Stelios Bouras contributed to this article.

Write to Alkman Granitsas at alkman.granitsas@dowjones.com, Costas Paris at costas.paris@dowjones.com and Matina Stevis at matina.stevis@dowjones.com

A version of this article appeared June 21, 2012, on page A9 in the U.S. edition of The Wall Street Journal, with the headline: Three Greek Parties Form Coalition.

Article source: http://online.wsj.com/article/SB10001424052702304898704577477911674918518.html?mod=rss_economy