Pro-Euro Economist Papademos Takes Charge in Greece

Lucas Papademos might have been hoping to gently ease into retirement after close to four decades as an economist and central banker.

Lucas Papademos
Aris Messinis
Lucas Papademos

Now that his appointment as caretaker prime minister of Greece has been announced, the quiet-spoken academic is facing a much busier time.

Papademos is viewed in and outside Greece as a compromiser and a non-partisan candidate who has good relationships with European leaders and fiscal policymakers—he was vice-president of the European Central Bank (ECB) for most of the last decade.

His strong commitment to the euro, which he helped bring to Greece, should help reassure European policymakers at a time when the possibility that the debt-laden country may exit the euro zone has been acknowledged by politicians as high-profile as France’s Nicolas Sarkozy.

Papademos has spoken out about the importance of the euro to smaller countries and has said in interviews that Greece would stay in the single currency.

“There is zero chance, for the simple reason it entails costs that are far beyond any possible benefit,” he said in May. “For Greece, the impact would be much worse than they are facing now. For those who think properly through the options, it is not an option.”

Like Amherst-educated political rivals George Papandreou and Antonis Samaras, Papademos received part of his education in the United States. He is married to Shanna, an artist and art teacher.

The 64-year-old was educated at MIT, where he earned a bachelor of science in physics, a master of science in electrical engineering, and a PhD in economics. He has taught at both Harvard and Columbia.

While teaching economics at Columbia between 1975 and 1984, he served a stint at the Federal Reserve Bank of Boston.

In 1985, he joined the Bank of Greece as chief economist, rising to the position of governor in 1994.

After leaving his spell as governor of the central bank, during which Greece joined the euro, he served as vice-president of the ECB from 2002 to 2010.

Greece's euro membership has since come under attack from critics including French President Sarkozy.

Last month, Sarkozy said in an interview on French television that admitting Greece to the euro zone had been "a mistake" because the country had "entered with false figures. It was not ready."

There is no suggestion that Papademos had anything to do with the alleged "false figures."

He said last year that any accusations were "totally unwarranted" and assume "that we knew that the budget figures provided by the government were not complete or were inaccurate, and this was not the case."

Papademos has said in the past that he has an "eclectic" approach to economics, although he studied under Franco Modigliani, one of the great Keynesian economic theorists, and a Nobel Prize laureate, while at MIT.