Greece names former banker as new prime minister

@CNNMoney November 10, 2011: 9:20 AM ET
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Lucas Papademos, a former banker and European Central Bank vice president, has been named interim prime minister of Greece.

ATHENS, Greece (CNN) -- Lucas Papademos, a former banker and European Central Bank vice president, has been named interim prime minister of Greece, the Greek president's office said Thursday.

Papademos was one of several political leaders meeting with Greek President Karolos Papoulias with the goal of forming a new national unity government.

Papademos told reporters the chief task of the transitional government was to implement the controversial bailout package agreed to with European leaders late last month.

He said its formation would allow Greece to "face the problems in the near future in the best possible way."

The new government will be sworn in Friday afternoon, the president's office said.

Global economy at the tipping point

The announcement follows days of wrangling over the make-up of a national unity government needed to restore political stability in Greece, after several days of turmoil that have unnerved global financial markets.

Prime Minister George Papandreou's office had said he would resign Wednesday, but that move was delayed until Thursday.

In a televised address to the nation, Papandreou said that a government of national unity would do whatever was necessary to bring Greece out of its economic crisis.

The country will be stronger and more secure after it implements the European bailout deal, he said.

Greece wants the international community to see that it knows how to be united in the face of difficulty, he added. "A new season is opening," he said, adding that he wished the new government success.

Papandreou met Wednesday night with Papoulias, but did not offer his resignation.

The outgoing prime minister triggered the political crisis by announcing plans last week to call a referendum on the bailout deal. Agreement on the package had sparked anger from many Greek people, already feeling the pain of earlier austerity measures.

The drama in Greece has shaken international markets, with investors afraid the new bailout deal -- which has stringent austerity measures attached -- may not be implemented.

Christine Lagarde, managing director of the International Monetary Fund, warned Wednesday of the potential for a "lost decade" if nations do not join forces against the "dark clouds" gathering on the horizon.

"The global economy has entered a dangerous and uncertain phase," she said, addressing the 2011 International Finance Forum in Beijing.

"If we do not act, and act together, we could enter a downward spiral of uncertainty, financial instability, and a collapse in global demand. Ultimately, we could face a lost decade of low growth and high unemployment," Lagarde said.

-- CNN's Elinda Labropoulou and Andrew Carey in Athens contributed to this report. To top of page

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