LUCAS PAPADEMOS, the new prime minister-designate of crisis-ridden Greece is seen as an advocate of fiscal discipline. As a former European Central Bank vice-president, he is seen as well-placed to handle the debt crisis, albeit on an interim basis until after a general election.
Papademos (64) is well-known in Europe’s capitals. As head of the Bank of Greece, he oversaw his country’s move from the drachma to the euro in 2002.
More recently, as an adviser to the outgoing prime minister George Papandreou, he took part in the negotiations between Athens and the troika of international creditors – the IMF, the European Commission and the ECB – bailing out the Greek government.
His career has crossed the academic and policymaking worlds. After finishing secondary school in Greece, Papademos moved to the US where he studied physics and engineering at the Massachusetts Institute of Technology.
For his PhD, however, he switched to economics, graduating with his thesis on employment and anti-inflation policy in 1977.
After a stint at Columbia University in New York, he returned to Greece where he joined the central bank as its chief economist in 1985.
The role gave him a chance to put his academic experience into practice.
In 1994, he became governor of the Bank of Greece, where he worked to stabilise the Greek economy so that it could join the euro zone. He argued the benefits of the single currency, saying: “The macroeconomic and microeconomic benefits for Europe and Greece from the introduction of the euro are enormous.”
Critics say as central bank governor he should have been in a position to know of inaccuracies in Greece’s budget figures during the run-up to joining the euro, a charge he has denied.
He left the Bank of Greece in 2002 and became vice-president of the ECB under Jean-Claude Trichet, a position he left last year to serve as an adviser to Papandreou.
During his time at the ECB, Papademos was seen as a strong advocate of fiscal and budgetary discipline. He shared Trichet’s view that the ECB should not play a large role in bailing out highly indebted euro zone governments.
As prime minister, he will have to convince the Greek public that further austerity measures are needed to eventually restore the economy to health. He must also keep the two major parties – socialist and conservative – from playing damaging short-term political games, analysts say.
– (Reuters)