Ex-banker Papademos is new Greek prime minister

Ex-banker Papademos is new Greek prime minister

After four days of intense political negotiations, the 64-year-old former vice president of the European Central Bank was chosen to lead a coalition backed by both the governing Socialists and opposition conservatives that will operate until early elections in February.

He replaces outgoing Socialist Prime Minister George Papandreou midway through his four-year term. A statement from the president's office said Papademos would form an interim government that will secure and implement the decisions of USD 177 billion European debt deal agreed upon during a summit in Brussels on Oct. 27.

That deal is the country's second massive bailout, after a first -- USD 150 billion -- rescue package was deemed not enough to keep Greece from bankruptcy. The new cabinet will be sworn in Friday afternoon.

The latest Greek crisis erupted last week, when Papandreou said he would put the hard-fought European debt deal, that involves private bondholders canceling 50 percent of their Greek debt holdings, to a referendum.

The announcement horrified European leaders, sparked a rebellion in his own party and caused an uproar in financial markets. Papandreou withdrew the referendum plan and agreed to step aside for a unity government.

Papademos, a former ECB vice president who is not a member of any party, has been operating lately as an adviser to the prime minister.