11 November 2011 Last updated at 00:42 ET

New Greek Premier Lucas Papademos seeks unity over euro

 

Lucas Papademos said Greece was at a crossroads, and called for unity

New Greek Prime Minister Lucas Papademos has said the priority of his incoming coalition cabinet is to seek unity to keep Greece in the eurozone.

"The choices we make will be decisive for the Greek people," he said, adding that the euro was vital for prosperity.

Debt-laden Greece must quickly approve a EU bailout to secure vital loans.

Mr Papademos, a former European Central Bank vice-president, was named on Thursday after protracted talks. His cabinet is to be sworn in on Friday.

Mr Papademos, who is not a member of parliament, will head the interim government until elections can take place in February.

Reports say he has accepted that the current Finance Minister, Evangelos Venizelos, remains in place. The exact make-up of the new coalition government is yet to be agreed.

'Critical point'

The BBC's Mark Lowen in Athens says Greece is in uncharted territory with this national unity government - an extreme measure for extreme times.

Analysis

Mark Lowen BBC News, Athens

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For the first time this week, Greeks are waking up to a country with a government in place. It had taken days of wrangling for Lucas Papademos to be named as the new Prime Minister.

Later the government of national unity will be formally sworn in, each minister taking an oath of office. And then the hard work starts.

The first and urgent task is to begin parliamentary approval of Greece's recent bailout package, so as to receive its international loan and avoid bankruptcy. Mr Papademos will be forced to pursue cost-cutting measures, which are not likely to go down well with an austerity-weary nation.

But what he has is a broad base of political support here - and that may just give this former banker the necessary advantage to succeed.

• Greek PM's 'poisoned chalice'

Mr Papademos, 64, was named following days of tough negotiations between party leaders.

Speaking after the announcement, he said he was taking over at a "critical point" for Greece.

"The path will not be easy but I am convinced the problems will be solved faster and at a smaller cost if there is unity and consensus," he told reporters.

Mr Papademos said his first priorities would be to ratify the 130bn euro ($177bn; £111bn) rescue package agreed at an EU summit last month, and to implement the policies linked to it.

That will involve another round of austerity measures, which have already proved hugely unpopular with the Greek public.

Leaders of the three main parties making up a new government of national unity had been meeting the Greek president to try to reach a deal.

Mr Papademos replaces Greece's outgoing Prime Minister George Papandreou, who was forced to step aside after a disastrous call for a referendum on the eurozone rescue package.

The referendum plan was dropped within a few days, but not before sparking the wider financial and political crisis which led to Mr Papandreou's forced withdrawal from the top job, even though he narrowly survived a confidence vote.

The new PM will also face a confidence vote in parliament, which is expected to happen on Monday, Greek state TV reported.

In Italy, meanwhile, there was increasing speculation that former European Commissioner Mario Monti would take over from outgoing Prime Minister Silvio Berlusconi.

The markets appeared to calm amid hopes that the economist would take over the reins shortly, correspondents say, and borrowing levels fell back from the previous day's record highs.