Banker takes the helm and calls for unity to stave off national bankruptcy

Senior banker Lucas Papademos has been appointed prime minister of an interim Greek unity government that seeks to cement a European debt deal and stave off national bankruptcy.

Chosen after four days of power-sharing talks, Mr Papa-demos immediately called for unity and promised to seek cross-party cooperation to keep Greece firmly in the 17-nation eurozone.

The 64-year-old former vice president of the European Central Bank will lead a government backed by both the governing socialists and the opposition conservatives that will operate until early elections, tentatively set for February.

He replaces outgoing prime minister George Papandreou midway through a four-year term. The new Greek cabinet, whose members have not yet been named, will be sworn in this afternoon.

In Athens, hopes rose that Greece will avoid a bankruptcy that could push Europe into a new recession and world financial markets into turmoil.

“I am not a politician but I have dedicated most of my professional life to exercising financial policy both in Greece and in Europe,” Mr Papademos said after the Greek president gave him the mandate to form a cabinet.

“The Greek economy continues to face huge problems despite the great efforts than have been made for fiscal reform.”

“The participation of our country in the eurozone is a guarantee for the country’s monetary stability. It is a driver of financial prosperity,” Mr Papademos said, adding that just being in the eurozone will help Greece through its troubles.

Shares on the Athens Stock Exchange were up 1.6 per cent on the news of the power deal. That came despite more bad news for Greece’s recession-hit economy: unemployment surged to 18.4 per cent in August, up from 12.2 for that month in 2010.

Many Greeks are deeply angry after 20 months of government austerity measures. Unions have held repeated strikes and many demonstrations have degenerated into riots.