Europe

Lucas Papademos: A man who tried to rescue Greece

Lucas Papademos - 29 Feb 12 Image copyright AFP
Image caption Lucas Papademos - a banker who spoke the same language as Greece's creditors

Banker Lucas Papademos served as Greek prime minister for six months in 2011-2012 at the height of the country's debt crisis.

On Thursday he was rushed to hospital with leg injuries after an explosion in his car in Athens. His driver was also hurt by the device, concealed in an envelope. Reports say their injuries are not life-threatening.

In November 2011 he was offered the post of interim prime minister at the age of 64, as a non-party technocrat trusted by Greece's international creditors at a time of peril for the country's debt-ridden economy.

At that time he was an adviser to outgoing Prime Minister George Papandreou, involved in the tough negotiations with the "troika" of creditors - the IMF, European Commission and European Central Bank (ECB).

He stepped in after Mr Papandreou had shocked the creditors by trying to hold a referendum on the bailout terms. That plan was dropped, and Mr Papademos formed a new coalition made up of Mr Papandreou's leftist Pasok and centre-right New Democracy.

He was seen as untainted by the old-boy political networks that many Greeks blamed for the country's large-scale corruption and addiction to debt.

But the task of pursuing the austerity programme imposed by the creditors was highly controversial.

Image copyright Reuters
Image caption Mr Papademos's car after the blast in Athens - no external damage can be seen

Mr Papademos was vice-president of the ECB in 2002-2010, sharing the monetary stability credo of then-superior Jean-Claude Trichet and the current ECB chief, Mario Draghi.

According to the New York Times, Mr Papademos and Mr Draghi studied together at the Massachusetts Institute of Technology (MIT), both earning doctorates in economics in the late 1970s, and remained close.

During his short tenure as prime minister, Mr Papademos stuck with the harsh austerity demanded by the creditors in exchange for Greece's cash lifeline.

On taking office, he stressed that his priority was to keep Greece inside the eurozone. He did so, but in the face of much anger at the social cost, as Greece's overall debts, job cuts and mass unemployment all continued to grow.

Euro enthusiast

As head of the Bank of Greece, he oversaw his country's move from the drachma to the euro in 2002.

It is not clear whether he was involved in deals which allegedly masked the true size of Greek debt at the time.

After finishing secondary school in Greece, Mr Papademos moved to the US where he studied physics and engineering at MIT.

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, Mr Papademos returned to Greece where he joined the central bank as its chief economist in 1985.

In the 1990s he praised the euro, saying: "The macroeconomic and microeconomic benefits for Europe and Greece from the introduction of the euro are enormous."

He said monetary policy - the supply of money and setting of interest rates handled by central banks - was not enough to address inadequate growth in Europe.

He called for "supply-side" measures - that is, policies aimed at boosting the supply of goods and services by lowering taxes and reducing regulation.

Related Topics

More on this story