Greece's new premier, Lucas Papademos, was sworn in along with a new unity government on Friday. With the key position of finance minister unchanged, the cabinet is charged with implementing the country’s controversial austerity measures.
AFP - Greece's new unity government headed by Lucas Papademos took office on Friday to save the debt-stricken nation from bankruptcy after a historic power-sharing deal struck between warring parties.
Papademos, 64, a former vice-president of the European Central Bank, will lead a transition government which will have to ratify a crucial 130-billion-euro ($178 billion) international bailout and pave the way for new elections.
"The new government of cooperation will do the best it can possibly do to address the country's problems," he said during a meeting with outgoing prime minister George Papandreou.
Papademos was welcomed with relief in a country exhausted by two years of austerity and exasperated by political squabbling over cutbacks demanded by its global creditors, the European Union and the International Monetary Fund.
Greece's chief EU partners France and Germany, who are shouldering a major part of loans keeping the country afloat, also weighed in with encouragement.
German Chancellor Angela Merkel said Berlin would "stand by" Athens while French President Nicolas Sarkozy said his country would continue to provide "support and assistance" to Athens.
The procedure to confirm the new government in parliament will begin Monday and its first job will be to persuade the EU and IMF to disburse an eight-billion-euro slice of aid from a 2010 bailout deal that is needed by December 15 before state coffers run dry.
Then it must force through painful austerity measures exacted as the price for a second EU rescue package which gives Athens 100 billion euros in loans, the same amount in debt reduction and a further 30 billion in guarantees.
Finance Minister Evangelos Venizelos, at the new government's first cabinet meeting later Friday, said Greece would do everything in its power to obtain approval for the eight-billion-euro payout by November 17.
Greece must "do everything necessary" to obtain the funds, adding that it was also urgent that the process of writing down Greek debt get underway by Tuesday and he set himself a target of November 18 for presenting the Greek budget bill for 2012.
The new cabinet is a delicate balancing act reflecting the power-sharing deal between the Pasok socialists, New Democracy conservatives and far-right nationalist party LAOS that clinched a succession deal Thursday after four days of marathon talks.
Venizelos, 54, kept his job ahead of tough negotiations with global bankers and creditors to help reduce the country's debt.
Ex-EU environment commissioner and conservative party veteran Stavros Dimas, 70, takes over the foreign ministry, inheriting a name row with neighbouring Macedonia that has festered for two decades.
And four far-right officials were invited into the government in a first since democracy was restored in 1974 after an army dictatorship fell.
Twelve members of the outgoing socialist administration retained their posts, while the conservatives were also given the defence ministry, which will be run by ex-Athens mayor and former career diplomat Dimitris Avramopoulos, 58.
The nationalists received the infrastructure ministry and three junior ministry positions.
The Athens stock exchange, flat since the morning, closed 0.86 percent down.
The swearing-in ceremony was delayed by two hours owing to last-minute negotiations between the three coalition partners, reports said.
Also tasked with holding early elections as soon as the EU deal is ratified by parliament, the new administration can count on the support of 254 deputies in the 300-seat parliament.
Papademos, who played a crucial role in Greece's entry into the eurozone nearly a decade ago, emphasised its benefits after weeks of speculation that Greece's problems could force it out of the 17-nation currency club.
"The Greek economy is facing huge problems despite the enormous efforts made... Greece is at a crucial crossroads," he said after being named prime minister on Thursday. "The course will not be easy."
The European Commission has warned that Greece has no hope of climbing out of recession next year, forecasting a 2.8 percent contraction.
The last unity government in Greece in 1989 was also headed by an eminent economy expert, former bank of Greece governor Xenophon Zolotas, and only lasted three months.
Date created : 2011-11-11