Greece, Italy turn to experts to address debt

Associated Press

ATHENS, Greece

Europe’s financial crisis eased Thursday as Greece installed a respected economist to replace its prime minister and Italy appeared poised to do the same — both hoping that monetary experts can do better than the politicians who drove their nations so deeply into debt.

The announcement in Athens — coupled with the prospect that volatile Italian Prime Minister Silvio Berlusconi will be ushered out soon — quieted market fears, at least for now, that turmoil in Europe could threaten the global economy.

But significant challenges remain in both debt-heavy Mediterranean countries.

Greece’s new prime minister, Lucas Papademos, a former vice president of the European Central Bank, must quickly secure the crucial loan installment without which his country will go bankrupt before Christmas, and approve the EU’s $177 billion bailout deal.

In Italy, lawmakers have to pass new austerity measures over the next few days. However, expectations that respected economist Mario Monti will lead an interim government after Berlusconi goes helped lift the gloom.

Italy’s borrowing costs shot up Wednesday on fears that Berlusconi would linger in office. But the markets calmed Thursday when it appeared that Italian lawmakers would approve the latest austerity plans in the next few days and Berlusconi would resign after that.