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Greece's new prime minister says nation is at a crossroads

Lucas Papademos, named to replace George Papandreou, calls for unity. His challenge: Enact an unpopular new bailout plan stitched together last month by European leaders to stave off Greek default.

November 10, 2011|By Anthee Carassava, Los Angeles Times
  • Lucas Papademos, the newly chosen prime minister of Greece, talks to the media after a meeting with Greek political leaders in Athens.
Lucas Papademos, the newly chosen prime minister of Greece, talks to the… (Yannis Behrakis, Reuters )

Reporting from Athens — Lucas Papademos, a banker and visiting professor at Harvard University, on Thursday landed one of the world's least popular jobs: prime minister of Greece.

After days of haggling, Greece's two main political parties named Papademos, a trained economist and former governor of the Greek central bank, as the financially strapped country's new prime minister for at least the next few months.

In his first public statement, the soft-speaking 64-year-old tried to allay public concerns and instill some semblance of hope.

"I am not a politician, but I have dedicated the biggest part of my career to public policy," he said. "Greece is at a crossroads … and the way forward will not be easy, but our problems can be solved, and will be solved, if there is unity, cooperation and discipline."

Papademos is expected to unveil the makeup of his government Friday before outlining his fiscal policy plan over the weekend. It remained unclear whether he would retain Evangelos Venizelos, another contender for the prime minister post, at the helm of the Finance Ministry.

A low-key academic who oversaw Greece's entry into Europe's shared euro currency a decade ago, Papademos is charged with steering the country away from financial disaster and heading a transitional government tasked with enacting an unpopular new bailout plan stitched together last month by European leaders to stave off default by Athens.

The appointment capped four days of high political drama, back-room deals and maneuvering as European officials threatened to evict the tiny, sun-kissed nation from the 17-nation Eurozone. The government's austerity measures have included thousands of public-sector job cuts and pension reductions.

"Eventually," quipped Constantine Michalos, head of the Athens Chamber of Commerce, "they all came to their senses and picked the best person for the job."

Outgoing Prime Minister George Papandreou, who won a narrow vote of confidence in Parliament on Saturday, announced a day later that he would step down in favor of a new leader to head a government of national unity. Greek lawmakers on all sides had called on him to let a less divisive figure take over and guide the country through its debt crisis.

After heading the country's central bank, Papademos served as vice president of the European Central Bank from 2002 to 2010 and is now a visiting professor at the John F. Kennedy School of Government at Harvard.

Under pressure from European peers and international lenders, Greece's rival parties agreed to form a landmark coalition government with the sole aim of ratifying and implementing a new loan and debt agreement that includes $140 billion in fresh rescue funds for Athens, plus a 50% write-down of Greek debt in private hands.

Athens' creditors have warned that failure to ratify and enact the new plan would block disbursal of $11 billion in emergency loans from Greece's first international bailout package, which was granted last year. Without the aid, Greece could go bust within weeks.

While the exact duration of the new administration remains unclear — general elections are tentatively scheduled for mid-February — the new government will have to implement Greece's latest loan package, pass a 2012 budget and unlock the billions of dollars in rescue aid that creditors blocked after Papandreou surprised European leaders this month by saying he would put the highly unpopular bailout agreement to a public vote.

Under intense pressure from European leaders, the plan for a referendum was scrapped.

It remains unclear how popular a choice the new prime minister will prove in a country reeling from severe austerity measures.

"There will be a need for continuity, especially in certain areas," Papademos told The Times late Thursday. "What's important is that we get to work."

Carassava is a special correspondent.

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