Senior Banker Lucas Papademos was appointed Prime Minister of Interim Greek Unity Government

Senior banker Lucas Papademos was appointed prime minister of an interim Greek unity government on 10 November 2011. The interim government seeks to cement a European debt deal and ward off national bankruptcy. He replaced outgoing Prime Minister George Papandreou midway through a four-year term.

His appointment came after four days of power-sharing talks. Papademos following his appointment called for unity and promised to seek cross-party co-operation to keep Greece firmly in the 17-nation eurozone.

Former vice-president of the European Central Bank, Papademos will lead a government backed by both the governing Socialists and the opposition conservatives. He government will operate until early elections, scheduled to take place in February 2012.

Papademos' appointment came after nearly two weeks of political turmoil sparked by outgoing Prime Minister Papandreou's surprise announcement that he wanted to put his country's new C130 billion ($177 billion) European debt deal to a referendum. Papandreou came under tremendous pressure his anouncement. Bowing to pressure, Papandreou agreed to resign and reached a historic power-sharing deal with conservative opposition leader Antonis Samaras on 6 November 2011 to form a transitional government.

Shares on the Athens Stock Exchange were up 1.6 per cent at 779.6 on the news of the power deal power deal.

About Lucas Papademos

Papademos, who is not a member of any party, has been operating lately as an adviser to the prime minister. He taught at Columbia University from 1975 to 1984 and worked at the Federal Reserve Bank of Boston before returning to Greece to become chief economist at the Bank of Greece from 1985-1993.
He was then appointed deputy governor of the Bank of Greece where he was instrumental in fending off a speculative attack on the drachma.

As governor from 1994 to 2002, Papademos presided over an era of increasing independence from the government that was crucial in helping Greece secure membership in the eurozone. He then spent eight years at the European Central Bank.

Papademos’ Plans

Papademos planned to form an interim government that will secure and implement the decisions of a euro130 billion ($177 billion) European debt deal agreed upon during a summit in Brussels on 27 October 2011. That deal is the country's second massive bailout, after a first euro110 billion ($150 billion) rescue package was deemed not enough to keep Greece from bankruptcy.

Current Greek crisis

The latest Greek crisis erupted when Papandreou declared he would put the hard-fought European debt deal, that involves private bondholders canceling 50 percent of their Greek debt holdings, to a referendum. The announcement horrified European leaders, sparked a rebellion in his own party and caused an uproar in financial markets.

Papandreou later withdrew the referendum plan and agreed to step aside for a unity government.