Greece's hasty cabinet reshuffle has failed to boost confidence both domestically and internationally in the ability of the Greeks to help themselves out of the deepening debt crisis, Konstantinos Michalos, president, Athens Chamber of Commerce and Industry, told CNBC Friday.
On Friday, Greek Prime Minister George Papandreou appointed Defence Minister Evangelos Venizelor to run the Finance Ministry, replacing the unpopular George Papaconstantinou who was moved to lead the Environment Ministry.
The new government has 40 members and only three are new ministers following the reshuffle, while others were just moved to other positions, Michalos pointed out.
“We were assured that the actual government policy is on the right track, what purpose is served by assigning individuals to new departments that have failed in their previous mission?" he said.
“That’s why I am very pessimistic that these new measures will be passed and even if they are passed by a slight majority on Sunday evening the Prime Minister will seek a vote of confidence in the Greek Parliament, it would be very difficult with the situation as it is at the moment to be implemented,” Michalos added.
The protests came as the IMF agreed to a new bailout in exchange for further austerity measures. A program of spending cuts and tax increases put in place a year ago in May has been deeply unpopular with the Greek people.
“How can the PM who two days ago agreed with the leader of the opposition that the terms of the austerity package should be renegotiated with both our EU partners and the IMF suddenly make a 180 degree turn and seek a vote of confidence in two days based on the original austerity package put forward by the Troika?" Michalos said.
"We are living through a political saga which is running the danger of turning into a Greek tragedy and this must end, it must do so immediately,” he added.
Early elections are the only way out as the reshuffle is just changing the politicians around, Michalos said.
Austerity Measures Not Working
“The economic and political mixture of the reforms must be discussed again, we must re-negotiate," Michalos said.
"As the saying goes you can’t keep milking a cow without feeding it and this is exactly what’s happening in Greece." "We need a united political front to combat and negotiate better terms for Greek society and ultimately secure the interests of the EU but foremost ensure the financial normality of the global economy.
The danger of a systemic collapse is around the corner, so everyone is aware of it and ready to play their cards right,” he said.
Mario Monti, former EU Commissioner, also said that the political crisis was central to the resolution of Greece’s financial woes.
“This is a problem which needs to be dealt with politically by each member state," Monti said. "It's clear that not all the consequences of balancing a single currency have been thought of. The large member states need Greece to work. The whole problem politically in Greece is, should the private sector also participate in austerity?" he said.
- Catherine Boyle, CNBC.com, contributed to this story.