Kennedy School Professor Named Greek Prime Minister

Lucas Papademos, a soft-spoken professor of public policy, was scheduled to teach a graduate class on the global financial crisis next spring.

Instead, the Kennedy School scholar, who was named a visiting professor in April, has been suddenly thrust into a starring role in the emergency efforts to prevent a collapse of the European financial system, after he was tapped Friday as interim prime minister of his native Greece.

Papademos will lead a new Greek unity government formed after the fall of former prime minister George A. Papandreou, whose governing coalition disintegrated last week after his plans to submit a controversial $177 billion loan package to a referendum backfired. The move angered European leaders, who had negotiated the package as part of a Europe-wide effort to stabilize the euro. The plan also alienated some of Papandreou’s supporters, who feared the plan would be rejected.

Papademos, who was an unofficial adviser to Papandreou during the loan negotiations, faces a formidable task in the months ahead. His main task will be to implement the aid package, which includes a controversial provision for private sector banks to write off 50 percent of the face value of their Greek bond holdings. He will also have to deal with the passage of a new budget which will likely contain new austerity measures. Similar efforts have triggered a series of massive protests in Greece.

“The objective realities pose long odds on success,” said Graham Allison, a government professor at the Kennedy School. “So Lucas’ friends and colleagues can only applaud his courage in responding to this call and pray for miracles.”

Papademos, who enjoys a high approval rating in Greek opinion polls, is only expected to remain in office long enough to push through the reforms, according to news reports, although he could run in elections expected in the spring.

“[Papademos] is there to do one type of surgery, to get the financial packages from the Europeans negotiated on the best terms Greece can manage. But it’s not clear that they have the political muscle to force Parliament to meet all those standards,” said Richard Parker, a lecturer in public policy at the Kennedy School.

With elections taking place in Greece early next year, the selection of Papandreou’s successor became an intense political drama, with the opposition reluctant to support a leader who could prove to be a challenger.

However, Papademos is widely respected in Greece and in Europe. In 2010, he completed an eight-year term as vice president of the European Central Bank, the EU’s central bank. Prior to that, Papademos served as the governor of the Greek central bank from 1994 to 2002.

“That’s the anchor of his reputation,” said Parker. “He led Greece’s transition from the drachma to the euro, so he’s admired by the Eurocrats and in his own country by Greek businesspeople who felt going into the euro was a good thing at the time.”

At Harvard, colleagues aren’t holding their breath for Papademos’ return.

“He lectures on the Global Financial Crisis, but I think it would be fair to say he won’t be back for January term,” Parker said.