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Europe

Lucas Papademos, a banker to the rescue

Text by Charlotte Oberti

Latest update : 2011-11-13

Greece’s new interim prime minister, Lucas Papademos, has been described as accessible, modest and a man of reason. The question now is whether he has what it takes to lead his country out of its deep debt crisis.

The appointment of economist and former banker Lucas Papademos as Greece’s interim prime minister brought an end to the political wrangling in Athens. But the respected Greek technocrat is taking on one of the world’s toughest jobs.

Papademos is charged with salvaging the economy of a country whose debt the EU estimates at 162% of GDP for 2011 and which faces another year of recession. His predecessor, George Papandreou, lost what little credibility he still had with the Greek populace after his surprise October 31 announcement that he would put the country’s new debt agreement to a referendum, sending global markets into turmoil and infuriating European leaders as well as some of his own party members.

Papademos, the specialist

Successively governor of the Greek Central Bank (1994-2002), vice president of the European Central Bank (ECB) from 2002 to 2010 and an adviser to former prime minister Papandreou, Papademos has gained legitimacy with the country's creditors and its peers.

He is widely respected across the Atlantic following his stints as a professor at Columbia and Harvard University, as well as a board member of the Federal Reserve Bank of Boston.

Long in the shadow of former ECB president Jean-Claude Trichet, Papademos has repeatedly expressed his support for structural reforms and the implementation of austerity measures to reduce Greece's debt.

Structural reforms and austerity measures

But now it’s time for the low-key Papademos to take centre stage. On Friday, he was sworn in at the helm of an interim three-party coalition. The new Greek leader is under pressure from the European Union and the International Monetary Fund, and he must convince Greece’s parliament to pass the rescue plan drawn up in Brussels on October 27.

If he succeeds, Greece will receive the sixth tranche of a European Union loan, worth €8 billion, allowing it to avoid exclusion from the euro zone.

His appointment appears to have reassured the markets – at least for now – with stocks rising the day after the news of his appointment broke. However, the confidence he inspires among investors may not be mirrored among the Greek populace.

Papademos will have to impose austerity measures, push through a tough 2012 budget and launch a deeply unpopular €50 billion privatisation drive.

‘The victory of reason’

The 64-year-old banker represents a radical change from the Papandreou government. A political outsider, Papademos – unlike his predecessors Kostas Karamanlis and Papandreou – does not hail from one of Greece’s political dynasties.

Like many experts, Ilios Yannakakis, a historian and political scientist, has welcomed his appointment. “He is not viewed as a man from either the left or the right, which is a good thing. His appointment is a victory of reason,” Yannakakis said in an interview with FRANCE 24.

Sometimes described as introverted, this technocrat is the very opposite of a demagogue, Yannakakis said. Former colleagues have described Papademos as accessible, modest – and a perfectionist.

The question now is whether this man of reason will bring enough fortitude to the Herculean task of solving the Greek debt crisis.

Date created : 2011-11-12

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