Newly selected Greek PM Papademos calls for unity

Incoming Prime Minister Lucas Papademos, a former head of Greece's central bank, says country is at a "crucial crossroads."

November 10, 2011 15:31
2 minute read.
Incoming Greek PM Lucas Papademos [File].

Incoming Greek PM Papademos 311 R. (photo credit: REUTERS/Eric Vidal)


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ATHENS - Incoming Prime Minister Lucas Papademos called on all Greeks to contribute to resolving the huge problems faced by a country at a "crucial crossroads" on Thursday.

Papademos, a former European Central Bank deputy chief, said his new administration's main mandate is to implement a euro zone bailout deal and called for wider backing for the coalition.

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"The Greek economy is facing huge problems despite the efforts undertaken," he said in his first public remarks since being named Greece's next prime minister.

"The choices we will make will be decisive for the Greek people. The path will not be easy but I am convinced the problems will be resolved faster and at a smaller cost if there is unity, understanding and prudence."

The new coalition will be sworn in at 1200 GMT on Friday, an official in the president's office said.

Papademos, a respected figure in European capitals and on financial markets, will lead a national unity government that must sign up to a 130 billion bailout deal with the euro zone before calling an early election.


"He's a clear policy thinker. He was never involved in politics. He knows what needs to be done," said Thanos Papasavvas, head of currency management at Investec Asset Management in London.

In a sign of the daunting problems he will face, the statistics service ELSTAT reported that unemployment jumped to a record high of 18.4 percent in August - at the height of the tourism season when the rate traditionally falls - from 16.5% in July.

The appointment of Papademos followed four days of sometimes chaotic talks led by outgoing Prime Minister George Papandreou and conservative opposition leader Antonis Samaras.

As head of Greece's central bank from 1994-2002, the cautious, quietly spoken technocrat fought rocketing inflation and sought to impose monetary discipline on a country that frankly has never had any.

Along the way, he gathered enough kudos among Europe's leaders and with financial markets to find himself - to his own surprise - appointed as vice president of the European Central Bank, one of the highest international posts ever held by a Greek.

There is little doubt that background, along with a stint at the Federal Reserve Bank of Boston, qualifies him more than perhaps any one else to understand both the economic and international implications of Greece' debt debacle.

He is also cut from that modernist Greek cloth that eschews the kind of nationalistic chest-beating and conspiracy-driven machismo that has so often hurt the country's relations with others.

But the question is whether a somewhat introverted academic like Papademos can handle the rough and tumble of Greek politics, which includes violent street clashes and harsh personal enmities in parliament.

He is not unfamiliar with the syndrome but may be uncomfortable with it. As central bank governor he was widely condemned in the late 1990s for suggesting - rightly as it turns out - that Greece's stock market was a dangerous bubble.

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