Papademos to head interim gov’t to tackle crisis

Lucas Papademos, a former European Central Bank vice president, will head Greece’s crisis coalition government, it was announced Thursday.

The new interim administration will be sworn in at 2 p.m. on Friday.

A statement from President Karolos Papoulias’s office said the administration’s priority would be to adopt and implement Greece’s loan agreements with the eurozone and International Monetary Fund.

?Greece is at the crossroads,? Papademos told journalists outside the Presidential Palace in his first official statement as incoming premier, calling for ?unity, understanding and prudence… to deal with the problems in the best possible manner.?

?It is a great honor,? the 64-year-old economist said of Thursday’s decision. ?But the responsibility is greater.?

The agreement was reached after talks at the Presidential Palace between outgoing Prime Minister George Papandreou, conservative opposition leader Antonis Samaras, and rightist party leader Giorgos Karatzaferis.

Communist Party (KKE) leader Aleka Papariga and Alexis Tsipras, head of the Coalition of the Radical Left (SYRIZA), boycotted the meeting, objecting to the appointment of an unelected figure.

The transition government is being formed for approximately 15 weeks to secure current bailout funding for the debt-wracked country and a new a 130-billion-euro rescue package from the European Union and the IMF.

The power-sharing deal was struck after days of byzantine negotiations and embarrassing political theater which appeared to push Greece closer to default and a eurozone exit.

Marathon negotiations hit a deadlock on Wednesday night following differences between — as well as within — the Socialist and conservative parties. A large number of PASOK MPs, as well as ND deputies, on Wednesday were said to be vehemently opposed to the apparent choice of Parliament Speaker Filippos Petsalnikos — a close associate of Papandreou and a party stalwart — for interim premier.

But Papandreou and Samaras later agreed on a fresh round of talks for Thursday morning.

Papademos, a veteran of eurozone politicking with a quiet, technocratic style, is widely portrayed as Greece’s best hope of putting an end to months of uncertainty and partisan bickering.

?He is a wise person. It is important that he has dealt with substantial issues in the past,? political analyst Antonis Karakousis said of Papademos in an interview with Skai Radio on Thursday.

Nikos Xydakis, a commentator with the Greek daily Kathimerini newspaper, expressed ?a sigh of relief? over Thursday’s decision. But he predicted that a likely ?fresh round of belt-tightening measures would further test the patience of the public.?

Foreign observers also appeared to welcome the deal.

?He?s a skilled and thoughtful banker,? Fredrik Erixon, head of the European Center for International Political Economy in Brussels, told Bloomberg in a telephone interview. ?And he?s got sufficient distance from Greek politics to be seen as someone standing above Greek party political corruption,? he said.

In a sign of the daunting tasks ahead, Greece’s national statistics agency ELSTAT on Thursday reported that the unemployment rate increased to 18.4 percent in August from 16.5 percent in July and 12.2 percent a year earlier. The number of unemployed hit 907,953 in August, a 10.7 percent increase from the previous month.

Papandreou, who never recovered from his explosive decision to put the European rescue package to a referendum, has agreed to step down to make way for the new government. In a bow-out address on Wednesday, the PASOK leader said the apparent breakthrough had rescued the country’s membership of the eurozone.

?I am proud that, despite the difficulties, we avoided bankruptcy and ensured the country stayed on its feet,? Papandreou said. ?I want to wish the new prime minister success, I will support the new effort with all my strength,? he said.

News of Papademos’s appointment came only hours after IMF chief Christine Lagarde called for greater ?political clarity? in Greece and Italy — which is also dogged by domestic political upheaval fueled by the debt crisis that has engulfed the euro area.

?Political clarity is conducive to more stability… it is much needed in Greece, it is much needed in Italy,? Lagarde said during a visit to Beijing.