Global markets breathed a sigh of relief this morning, as Greece's new Prime Minister was sworn into office on a mandate to implement a $177 billion European bailout and impose austerity measures on Greek society. The Dow Jones industrial average opened up 175 points, with the S&P 500 and Nasdaq following suit with 1.4 percent and 1.2 percent gains respectively. With the fate of the euro zone in the balance, Papademos, formerly a banker and European Central Bank vice president. will need satisfy both EU austerity hawks and disgruntled Greek citizens. Here are the key features of this juggling act:
He'll have European elites on his side Vassilis Monastiriotis, a senior lecturer at the London School of Economics tells CNN Papademos is "well versed in Greece's financial and political systems and is well respected by economists, Greece's politicians and European leaders ... Papademos has the advantage of a well defined assignment -- ratifying the October 26 bailout agreement and passing the legislation to implement it."
Elite support could work against him, though Harold Meyerson at The American Prospect notes that Papademos has never held elective office or served as a minister or sub-minister of any kind in the country. His support primarly from outsiders could work against him at home. "Imagine if the U.S. couldn’t sell its Treasury notes (which has never been a problem, let’s be clear), and the International Monetary Fund and Germany and China got together and said that Barack Obama, Joe Biden, the Cabinet and the Congress had to go. Imagine that they then designated as Obama’s successor, say, the guy who followed Tim Geithner as head of the New York Fed (I don’t even know who that is), or Robert Zoellick, the American who heads the World Bank. That’s essentially what just happened."