Ex-banker Papademos is new Greek PM

The Associated Press

ATHENS -- Senior banker Lucas Papademos was named Thursday as the prime minister of the new interim government, charged with keeping the debt-strapped country out of bankruptcy and firmly in the 17-nation eurozone.

After four days of intense political negotiations, the 64-year-old former vice president of the European Central Bank was chosen to lead a coalition backed by both the governing Socialists and opposition conservatives that will operate until early elections in February.

He replaces Socialist Prime Minister George Papandreou midway through his four-year term.

A statement from the president's office said Papademos would form an interim government that will secure and implement the decisions of a $177 billion European debt deal agreed upon during a summit in Brussels on Oct. 27. That deal is the country's second massive bailout, after a first $150 billion rescue package was deemed not enough to keep Greece from bankruptcy.

The new cabinet will be sworn in this afternoon.

Papademos, a former ECB vice president who is not a member of any party, has been operating lately as an adviser to the prime minister.

Other eurozone nations have refused to give Greece its latest installment of bailout cash -- $11 billion -- until it approves the second bailout deal, which took European leaders months to hash out.

The markets want clarity soon so the new government can secure bailout cash to avoid an imminent bankruptcy that could push Europe into a new recession and world financial markets into turmoil.

Greece's deliberations over the past few days have taken a backseat to developments in much-bigger Italy, where Premier Silvio Berlusconi has announced his intention to resign soon after a new package of economic reforms is passed.

But concerns over a prolonged political gridlock in the eurozone's third-largest economy -- Italy is considered too big for Europe to bail out -- have roiled the markets.

Respected Italian economist Mario Monti was also named a senator for life, which puts him in line to run the next government. Monti, 68, now heads Milan's Bocconi University but made his reputation as EU competition commissioner, when he blocked General Electric's takeover of Honeywell.