Greece's designated finance minister resigns

FILE - In this Wednesday, June 20, 2012 file photo shows Greece's newly sworn-in Prime Minister Antonis Samaras looks on after his meeting with outgoing caretaker Prime Minister Panayiotis Pikramenos at Maximos Mansion. Greece's new prime minister was released from hospital on Monday, June 25, 2012 two days after undergoing eye surgery that will prevent him from traveling to a European Union summit in Brussels this week. (AP Photo/Kostas Tsironis, file)

FILE - In this Wednesday, June 20, 2012 file photo shows Greece's newly sworn-in Prime Minister Antonis Samaras looks on after his meeting with outgoing caretaker Prime Minister Panayiotis Pikramenos at Maximos Mansion. Greece's new prime minister was released from hospital on Monday, June 25, 2012 two days after undergoing eye surgery that will prevent him from traveling to a European Union summit in Brussels this week. (AP Photo/Kostas Tsironis, file)

ATHENS, Greece (AP) ? Greece's designated finance minister resigned Monday after being rushed to the hospital on Friday, the prime minister's office said.

Vassilis Rapanos, chairman of the National Bank of Greece, had been 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 Friday and has been in hospital ever since.

Rapanos has sent a letter of resignation to Prime Minister Antonis Samaras and that 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.

Samaras himself was released from hospital Monday after undergoing eye surgery to repair a detached retina over the weekend, but 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 Barack Obama.

The EU summit this 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 European Union nations that use the joint euro currency.

It was to have been preceded by a visit to Athens starting Monday of 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 Samaras and Rapanos can recover.

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 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. 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 general price index closed 6.84 percent down Monday.

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

Samaras' government, comprised of 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 hikes, 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."

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, Altafaj 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 finance ministry Monday showed that Greece's budget deficit for the first five months of the year was better than expected, standing at ?10.87 billion ($13.63 billion) instead of the target of ?12.89 billion ($16.17 billion) on a modified cash basis.

Revenue, however, was below target with the state budget net revenue standing at ?19.67 billion ($24.56 billion), ?926 million ($1.15 billion) short of the targeted ?20.6 billion ($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."

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David Rising in Berlin and Toby Sterling in Brussels contributed.

Associated Press

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