After days of backroom negotiations, Greek politicians have finally settled on a new leader: Lucas Papademos, former deputy head of the European Central Bank.
The soft-spoken financier agreed to serve as prime minister in a transitional government that will bring together the two main political parties in Greece to push through a highly unpopular bailout deal and save the country from bankruptcy.
Mr. Papademos called for unity and cooperation in his first public statements since he flew home this week to discuss his candidacy.
“The path will not be easy,” he said. “But I am convinced the problems will be resolved faster and at a smaller cost if there is unity, understanding and prudence.”
Initial reports suggested that Mr. Papademos secured an open-ended commitment from the parties so that he can implement the $177-billion deal reached on Oct. 26 with European lenders. The duration of his tenure had earlier been a sticking point in the negotiations, as the opposition New Democracy party had insisted the transition period before elections should not last more than 100 days.
His appointment suggests that Greece will fight hard to stay in the Euro zone and avoid defaulting on its debts; Mr. Papademos has previously argued that Greece would pay a high price for reverting to the drachma. The deal also means that the squabbling political parties in Greece have decided to work together, at least for the moment, to share the pain of implementing measures that will cost them votes in the coming elections.
If a new cabinet is sworn in as scheduled on Thursday, that will be followed by a mandatory three-day period of debate in parliament and a confidence vote to officially bring Mr. Papademos to power. That means he will take office just before massive demonstrations against the austerity measures, planned for Nov. 17, which are likely to become a test of popular anger against the closed-door process that gave him the reins.
Many financial analysts reacted positively to the appointment, describing Mr. Papademos as a neutral technocrat who is well-qualified to steer Greece through the crisis. The chatter in Greece on social media sites suggested less enthusiasm; many ordinary people feel as though the government's creditors have taken away some of their sovereignty.
“Putting a banker in charge of a bankrupt country is like putting a drug dealer in charge of a drug rehab center,” said one post on Twitter.
In the short term, the formation of a new government will allow Greece to unlock an $11-billion loan installment that had been withheld by lenders who grew nervous about the chaos. Without that money, the country was expected to run short of cash on Dec. 15.
Securing the long-term financing deal will required 180 votes in the 300-seat parliament, something the two main parties can easily deliver. Then, the new bailout plan will need approval by the International Monetary Fund, possibly during a meeting on Nov. 21.
Source: The Globe and Mail
0 comments:
Post a Comment