Lucas Papademos: The New Man In Greece

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Marco Werman: I'm Marco Werman, this is The World. Concerns about the euro debt crisis receded a bit today. In Italy, lawmakers moved closer to passing key financial reforms demanded by the European Union, and the country's president appeared to be on the verge of appointing a new interim government lead by a respected economist. That's good news for worried investors. Even better news came from Greece. That nation finally has its new government lead by you guess it, a respected economist. Richard Parker is a senior advisor to outgoing Greek Prime Minister George Papandreou. He's also a professor at Harvard's Kennedy School of Government, where Lucas Papademos has just been named as Greece's new prime minister is currently a visiting professor.

Richard Parker: He's part of a fairly thin stratum of Greek society that was educated internationally at the college level. He's a graduate of MIT with a bachelor's degree in physics, a master in electrical engineering, and a doctorate in economics. He's taught for several years at Columbia. Taught in Athens. And then moved over into monetary economics as an operator. He became chief economist of the Bank of Greece in the mid 1980s. He moved up there and eventually became head of the National Bank of Greece, and in that position essentially, worked on the transition of Greece from the drachma to the euro. Once that transition was made he was then moved from the Bank of Greece to the European Central Bank, where he was the Vice Chairman until 2010 when he came here as a visiting professor and also began advising the Papandreou government.

Werman: Do you think that Lucas Papademos is a good choice for prime minister? I mean what was your reaction when you heard he was going to become the new prime minister?

Parker: Well, you have to remember, this is a temporary slot. I don't want to call him interim prime minister, but he's meant to serve in a coalition government, a temporary unity government between the two big parties, Papandreou's PASOK party and Antonis Samaras' New Democracy party, the democrats and the republicans if you will of Greece. And Lucas was chosen because he isn't strongly identified with either. This would be a little bit like choosing Paul Volcker right now to head up the US government to get us past this gridlock in Washington. So he has a specific set of skills as a Central Banker and one should never think that Central Bankers are not politicians, but they're a very specialized sub species.

Werman: And Papademos doesn't seem to be a career politician. I'm just wondering in the middle of Greece's acute financial troubles maybe that's an advantage for an incoming prime minister.

Parker: Well, he's become a career Central Banker. And a career Central Banker, whether you're talking about Paul Volcker, or Alan Greenspan, or Mervyn King in the United Kingdom, they are politicians, but they're very sophisticated light touch politicians always looking for two things -- a place to unify parties when you've go sharp party disagreements, and second, a strong focus on the financial structure of the society, of fear of inflation, a fear of over spending and over indebtedness, they're bankers.

Werman: How do you reckon Greeks are receiving this news? Was Papademos ever a controversial choice in Greece? Are people happy with the decision?

Parker: Well, he was a controversial choice all this week because the idea of this unity government is controversial. And the idea of this unity government is controversial because a substantial minority of the Greek population, both on the left and on the right, on the Occupy Wall Street and the Tea Party, if you will, are damn mad about the situation as it's unfolded. Like Occupy Wall Street, most Greeks don't have a clear idea of what it is they would do as an alternative, but they want you to know that they are very, very upset.

Werman: And, Richard Parker, explain something to me and our listeners, that Papademos hadn't run for office, yet he is stepping into the prime minister's job. How unusual is that in Greece?

Parker: Oh, it's very unusual. I mean you know, not running for office and stepping into the job is reserved for the military, and they're not doing that right now and there's no likelihood that this military will do that again.

Werman: But it does seem to show that desperate times call for desperate measures.

Parker: Absolutely.

Werman: Is Lucas Papademos the person to bring European global confidence to Greece?

Parker: Well, I think that's why he's there. I think that's the other big argument is that he is a figure well known in European finance and banking circles, and is considered a moderate, stable, sophisticated voice. And he is all those things. He's the best choice under bad conditions for doing the technical things that need to be done to get Greece the money that it needs in order to survive and reform. He's not the political charismatic leader who will guide the Greek people, lead the Greek people to this new land.

Werman: Richard Parker, senior advisor to outgoing Greek Prime Minister George Papandreou, and a colleague at Harvard's Kennedy School of Government with Greece's incoming Prime Minister Lucas Papademos, thanks very much for coming to the studio.

Parker: Glad to be here.