(Reuters) - Greek Prime Minister George Papandreou sacrificed his finance minister on Friday and put his main socialist party rival into the job in a bid to force through an unpopular austerity plan and avert bankruptcy.

In Berlin, the leaders of Germany and France, long at odds over how to involve private holders of Greek bonds in a new rescue package for Athens, said they had united behind a mild solution favored by Paris and the European Central Bank.

Signs that Europe's two central powers had put aside their differences, and were pressing for a quick solution to the crisis that has rocked the currency area since late 2009, boosted the euro and reduced risk premiums on Greek and other peripheral bonds after a week-long financial rout.

"France and Germany want a new program in place as soon as possible. There is no time to lose," French President Nicolas Sarkozy told a joint news conference with Chancellor Angela Merkel.

The elevation of Defense Minister Evangelos Venizelos to the finance ministry was aimed at securing party backing for an austerity package required for the EU and IMF to disburse emergency loans to keep Greece afloat next month and avoid a default which could unleash global financial turmoil.

Analysts said the socialist heavyweight was a second-best choice after Papandreou failed to persuade respected former ECB Vice-President Lucas Papademos to come aboard, but it enabled him to dump several ministers who had obstructed reforms.

Outgoing Finance Minister George Papaconstantinou, who negotiated a first 110 billion euro bailout for Athens last year and had the confidence of international lenders and markets, was moved to the environment ministry in a crisis-driven reshuffle.

"Venizelos is politically powerful and that might bode well for the implementation of fiscal consolidation, even though he has no track record in financial matters," UBS analyst Alexander Kyrtsis said.

Initial Greek market reaction was positive with bank shares rising by as much as 4 percent and the Athens stock market index climbing 2 percent. [ID:nLDE75G0D4]

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