Papademos: Ex-central banker who won a bailout

February 22, 2012 RSS Feed Print

Monti managed to ease market pressure on Italy by quickly passing reforms through parliament and giving the country a respectable face after the antics of his predecessor Silvio Berlusconi.

But in contrast to Papademos, Monti was able to appoint outside experts — bankers, diplomats and business executives — to his 18-seat cabinet and not politicians, a difference that has been noted in Brussels.

Papademos' 45-member cabinet is cluttered with ministers left over from the previous Socialist government, some of whom seem more preoccupied with running for the party's leadership or bickering with the conservatives, rather than getting the job done. During extensive riots the night Parliament approved the new austerity measures, police were unable to prevent vandals from burning, smashing and looting more than 100 Athenian businesses. Illegal immigration remains unchecked, while crime rates are high.

"The government of Mr. Papademos is not a technical team," European Commission spokesman Amadeu Altafaj Tardio told a journalist who accused the EU of installing a technocratic regime in Greece. "I invite you to look closely at the composition of the government."

Born in Athens in the middle of the Greek civil war in October 1947, Papademos initially trained as a physicist before studying electrical engineering and economics at M.I.T. His thesis supervisor, and mentor, was the late Franco Modigliani, who received the Nobel Prize for Economics in 1985 for his work on household savings and the dynamics of financial markets.

Papademos taught at Columbia University from 1975 to 1984, successively as a lecturer, assistant and associate professor, before returning to Greece to become chief economist at the Bank of Greece from 1985 to 1993. He had already had a taste of central banking as a senior economist with the Federal Reserve Bank of Boston, in 1980.

In 1993, the newly elected Socialist government appointed Papademos deputy governor of the Bank of Greece. He rose to the helm a year later after helping fend off a speculative attack on the drachma.

As governor from 1994 to 2002, Papademos presided over a regime of declining interest rates and increasing independence from government interference that was crucial in helping Greece secure membership in the eurozone. His record helped him become vice president of the European Central Bank in 2002, where he stayed until 2010.

Papademos recently served as an unpaid adviser to Papandreou.

In his first speech to the Greek Parliament following his appointment, Papademos laid out how he would like his time in office to be remembered: "I hope that this government's administration will not be an interval, but rather a bridge that will ease the country's transition to fiscal balance and sustainable development."

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Gabriele Steinhauser in Brussels contributed.