THE GREEK PRIME Minister will today appoint a new cabinet in a concessionary move designed to seek support for new austerity measures.

George Papandreou will remain in his post but will put a new government to a vote of confidence in the parliament with renewed fears that Greece will default on its debt shaking the markets, according to BBC News.

Earlier there had been speculation that the Greek premier would resign and make way for a government of national unity. But that did not materialise.

Papandreou made a shock announcement about forming a new government to the Greek people last night following a day of fierce protests on the streets of Athens against the planned austerity measures.

The Greek government is under pressure to push through a new five-year campaign of tax rises, spending cuts and sell-offs of state property to continue receiving aid from the European Union (EU) and International Monetary Fund (IMF) and to avoid default.

The cuts would involve some €28 billion being slashed between 2012 and 2015 and would be required for the next tranche of €12 billion of aid to be handed down from the EU and IMF.

Previous reports indicated that this money would be paid out in July but that would appear to be dependent on the pushing through of this austerity package which is currently far from certain.

The ministerial reshuffle could include the replacement of Finance Minister George Papaconstantinou with the BBC speculating that the post will be filled by a former vice president of the European Central Bank, Lucas Papademos.

The Wall Street Journal labels being the head of the Greek finance ministry as the “worst job in Europe”.

Yields on Greece’s 10-year bonds have reached a record high of 18.4 per cent.