Monday, March 19, 2012

Papademos keeps drama out of crisis

Financial Times
March 18, 2012

Lucas Papademos was the perfect central banker – clever but conservative, cautious and low-profile. Since November, however, the former European Central Bank vice-president has had the toughest, most brutally exposed job in European politics: saving Greece’s economy from collapse.

He was thrown, reluctantly, into the task when the country’s crisis led to a breakdown in normal politics. In an interview with the Financial Times it is clear at least that Mr Papademos’s instinct for understatement remains unaffected. At the ECB, the issues were sometimes tough, “but the challenges that I have confronted over the past four months have been wider in scope and greater in intensity”.

Those challenges involved averting a disorderly default and catastrophic exit from the eurozone, overseeing the largest debt restructuring in history, and securing a fresh, €174bn bailout plan from sceptical European partners and the International Monetary Fund. He has pushed through savage public spending cuts and forced bickering party leaders to agree a sweeping agenda of structural reforms.

All the while, Greeks have suffered what Mr Papademos describes as “negative aspects” of the crisis – a precipitous fall in economic activity, a severe “credit crunch” and unemployment levels that have soared above 20 per cent. Youth unemployment is above 50 per cent. Across Athens, banks’ buildings remain burnt out after riots earlier this year. Protest rallies take place daily in the city’s crowded streets.


Read the Transcript of the Interview

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