Papademos sworn in, heads Greek cabinet of stalwarts (Reuters)

ATHENS (Reuters) ? Technocrat Prime Minister Lucas Papademos took office on Friday to save Greece from bankruptcy, heading a coalition cabinet filled with many of the same politicians who led the nation into crisis and pushed the euro zone to the brink of collapse.

At a colourful swearing-in ceremony, black-robed Orthodox priests, led by the Archbishop of Athens, blessed Papademos, a former vice president of the European Central Bank, and a cabinet dominated by the two main parties which had bickered for four days before agreeing on the crisis coalition.

"With the unity of all people, we will succeed," Papademos told George Papandreou, who led the previous Socialist administration that fell apart last week.

Apart from Papademos, who has no political experience, the main new face in the cabinet is a minister from the LAOS party -- the first time the far right has entered a Greek government since the country returned to democracy in 1974 following years of military rule.

The line-up includes Socialist party power broker Evangels Venizelos, who keeps the post of finance minister that he held in Papandreou's government.

Analysts said Papademos -- a quiet academic economist -- had to assert his authority over a cabinet packed with the hardened conservative and Socialist party politicians who took turns in power for decades as Greece built up a huge debt that it could not manage, forcing an international bailout.

"Greece has a government that is the result of political compromise among three parties. It is obvious that there was a dealing of the cards," said Costas Panagopoulos, head of ALCO pollsters.

"It all now depends on how the prime minister handles them."

CLEAR MANDATE, TOUGH TASK

The interim government of national unity, which has a bumper 48 ministers and their deputies, has a clear mandate that may not be so simple to implement before it calls elections some time early next year.

It has to push through parliament Greece's second bailout deal in as many years, not only to get hold of the 130 billion euros of longer term funding it promises.

Greece also needs money fast from its IMF and EU lenders to meet hefty debt repayments due in December -- or face default, bankruptcy and the danger of leaving the euro zone.

The European Union has said Greece will not get the latest 8 billion installment of the original bailout to fund December's repayments unless Athens signs up to the new deal, agreed at a euro zone summit last month.

A source from the so-called "troika" of the EU, the IMF and the ECB said inspectors would visit Athens early next week to speak with the new government and would clear the next tranche only when it pledged to meet its commitments.

Both the Socialist PASOK and the conservative New Democracy parties say they will vote for the new bailout in parliament.

However, the package demands policies and reforms which are likely to be highly unpopular as the parties prepared for the elections, expected in February at the earliest.

It stipulates yet more of the punishing austerity that has kept the country locked in a fourth year of recession, sent unemployment soaring to a record 18.4 percent and brought Greeks out on to the streets in sometimes violent protests.

"The big problem with this government is that it is not elected by the people," said Christoforos Vernardakis, a political scientist at Thessaloniki university. "If unemployment reaches 25 percent in December ... I doubt that a technocrat can implement any policies to cope with this."

BEST Behavior

The two main parties kept Greece in suspense for days as they argued over who should lead the coalition, with one deal to install the speaker of parliament collapsing after Papandreou announced he was handing over to a new premier.

Deputy Infrastructure Minister Yiannis Magriotis -- one of several ministers from the outgoing government to keep his job -- promised the new cabinet would be on best behavior.

"Hard work is our priority, cooperation and prudence," he said. "We will work all together. There is no other way."

However, even after Papademos was confirmed as prime minister, maneuvering over who gets which job dragged on, with the cabinet list released only as ministers started arriving at the presidential palace to be sworn in.

Far-right LAOS won their place at table of a cabinet that was supposed to include all parties. However, left-wing groups refused to participate and a centrist group, which had split from New Democracy, was excluded on a technicality.

On the streets of Athens, people welcomed a fresh face at least at the top, but hoped the consequences would not be too severe for a country weary of hardship.

"The measures that have already been announced will be imposed," said civil servant Yiannis Papageorgiou, 57, referring to a wave of pay and pension cuts, public sector layoffs and privatizations agreed under the bailout deal.

"But at least I hope that the new government will not take any further measures, because until now Greek workers have been the only ones who have been paying for the crisis."

(Additional reporting by Tatiana Fragou, Angeliki Koutantou, Karolina Tagaris and Ingrid Melander; Writing by Michael Winfrey and David Stamp; Editing by Andrew Heavens)

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/nm/20111111/wl_nm/us_greece_f

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