Monday

27th May 2019

ECB man to rule Greece for 15 weeks

  • Papademos (L) in a huddle with former ECB chief Trichet at the EU Council in Brussels (Photo: consilium.europa.eu)

Lucas Papademos, a former vice-president of the European Central Bank (ECB), is to be sworn in as prime minister of Greece for a 15-week period in which he will pass laws on an EU bail-out package.

Following four days of back-room horsetrading between Pasok, the socialist party of George Papandreou, and Antonis Samaris, the head of the centre-right New Democracy party, it was agreed on Thursday (10 November) that Papademos would take over the premiership.

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Greece requires "unity, understanding and wisdom," he told reporters in his first statement as acting head of government.

"The Greek economy is facing huge problems despite the enormous efforts made ... The course will not be easy," he went on. "It is a great honour. But the responsibility is greater."

The banker, who helped run the ECB until last year, is designed to be an apolitical technocrat unassociated with party allegiances.

He is to lead a new administration of national unity - a cross-party formation demanded by the EU and core European powers to overcome fears that Papandreou could lose his wafer-thin majority in parliament, unravelling agreements with international lenders.

The often bitter clashes between Pasok and New Democracy had undermined market confidence that Greece's austerity programme will be upheld in the face of massive civil unrest.

EU leaders both publicly and behind the scenes pressed the Greek establishment to find an alternative to Papandreou to guarantee the EU-International-Monetary-Fund imposed programme of spending cuts and structural adjustment will go through in return for a fresh €130 billion rescue operation.

The previous choice of Filippos Petsalnikos, the speaker of the parliament, to replace Papandreou, foundered when MPs from both New Democracy and Pasok objected to a candidate viewed as being too close to the outgoing PM.

Papademos' demand for a longer term than either side had envisaged for a transitional government proved too much for the government and opposition, however.

He is to be sworn in at 2pm local time on Friday. But he will govern for just 15 weeks in order to shepherd the new bail-out package and its attendant austerity requirements through parliament. Snap elections are likely to follow.

A third group, the far-right religious party, Laos, has also signed up to support the new administration.

But the arrangement has been damned as "unconstitutional" by others.

The Communist party and the left-wing Syriza alliance both denounced the appointment of an unelected prime minister at the behest of international monitors.

"This is the will of Greek plutocracy and the EU," the Communist party said a statement. The faction, along with other parties on the left, have seen a surge in support in the wake of the crisis.

Greek leaders return to talks as coalition deal founders

An agreement on a Greek national unity government to be headed by the parliament’s speaker fell apart apart at the eleventh hour, deepening the country’s political turmoil just weeks before the country is expected to run out of cash.

Greek elite cobble together fragile unity government

Greece’s two mainstream political parties have agreed on a pact for a unity government after intense pressure from the EU, which warned the country would be left to go bankrupt if a cross-party consensus was not achieved.

Greek PM to president: unity talks on the way

At a midday audience with Greek President Karolos Papoulias, Prime Minister George Papandreou said that moves toward cross-party consensus is necessary to put to rest EU fears that the passage of a €130 billion bail-out deal is at risk.

Greek PM survives confidence vote, looks to transitional government

Greek Prime Minister George Papandreou narrowly won a vote of confidence in the country’s parliament early Saturday morning. Paradoxically, the leader at the same time appears ready to step down and make way for a transitional, unity administration.

Future Greek governments must be bound to austerity strategy

The European Union has insisted that no matter what political flavour of government is elected in Greece well into the future, they must all be bound to the current austerity strategy imposed by the bloc and the International Monetary Fund.

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