February 27, 2018 / 1:37 PM / 4 months ago

UPDATE 2-Greek economy minister quits after outcry over wife's rent allowance

* Papadimitriou resigns a day after wife also quit

* Resignations amid row over rent allowance wife drew

* Exits likely to trigger mini cabinet reshuffle

* Reshuffle won’t affect key finance ministry (Adds details, quotes)

ATHENS, Feb 27 (Reuters) - Greece’s Economy and Development Minister Dimitri Papadimitriou has quit his post in response to public anger over his wife’s use of a housing allowance, a move that will likely expedite a mini reshuffle of Prime Minister Alexis Tsipras’s cabinet.

Papadimitriou’s wife, Rania Antonopoulou, stepped down from her role as junior labour minister on Monday after media reported that she had claimed a 1,000 euro a month rent allowance.

The reports, some of which described the pair as the ‘richest couple in government’, incensed Greeks who have suffered years of austerity brought on by a debt crisis that many blame on political corruption and a spendthrift state.

Papadimitriou, whose remit involved promoting Greece abroad for investment projects, bowed out “for reasons of political sensitivity,” an economy ministry official told Reuters.

Antonopoulou said that she stopped drawing the benefit in mid-2017, and has offered to pay back the allowance.

Although there was nothing untoward about claiming the benefit, it touched a nerve in a country that has suffered the effects of a debilitating financial crisis and where a third of the population lives in poverty.

The average monthly salary of a Greek is 770 euros, and lawmakers on average earn 5,000 euros, without benefits.

Tsipras accepted Papadimitriou’s resignation and thanked him for his services, his office said in a statement.

The reshuffle is unlikely to be broad or to dislodge key finance ministers, including Finance Minister Euclid Tsakalotos. The country’s current bailout, the third since the crisis started, expires in August and Tsipras, whose term ends next year, hopes to be re-elected.

Athens has cut wages and slashed pensions at least 13 times since 2010, as part of measures to shore up its finances.

Papadimitriou contacted the prime minister late on Monday to announce his resignation, the ministry official said, adding that “he wanted to facilitate Tsipras in dealing with political pressures”, which emerged after the row over the rent allowance.

But opposition politicians said the couple should have shown common sense, and sensitivity.

“It is sad,” said leader of the centre-left Potami party Stavros Theodorakis.

“We are not talking about a worker who suddenly took over a ministry,” he said. “It’s a well-off family... which should have shown more care for citizens’ money particularly in a period that cuts are prevalent across the board.”

The benefit that Antonopoulou claimed is extended to members of government whose main residence is outside Athens. It was attached in a bill on the third bailout, which was approved by a wide majority of lawmakers in the 300-seat parliament in 2015. (Reporting By Renee Maltezou and George Georgiopoulos, Writing by Michele Kambas; Editing by John Stonestreet and Raissa Kasolowsky)

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