Ex-ECB VP to be Next Greek Finance Minister?

According to Greek television reports, Lucas Papademos will replace Giorgios Papaconstantinou as Greece’s finance minister.

This report has yet to be confirmed by the Greek government, however, according to Zero Hedge.

Unfortunately, this looks like nothing more than a change in title, due to Mr. Papademos’ background.  According to Wikipedia, “He followed an academic career at Columbia University, as well as serving as Senior Economist at the Federal Reserve Bank of Boston in 1980. He joined the Bank of Greece in 1985 as Chief Economist, rising to Deputy Governor in 1993 and Governor in 1994. He was Vice President of the European Central Bank from 2002 to 2010.”

Zero Hedge also noted that on several occasions this year, Papademos has warned against a debt restructuring of Greek sovereign debt, instead favoring the privatization of state assets and austerity measures.

But regardless of his views, perhaps he should take a look at how the markets feel, with Greek 2-year yields surpassing a ridiculously-high level of 30% today and credit default swaps indicating a 75% chance of default within 5 years.

So in summary what we have here is Greece replacing one can kicking advocate with another.  Moreover, Papademos held a senior level position at the ECB for 8 years in which the central bank ignored the fraud and corruption in Greece.

This is similar to Ben Bernanke’s re-appointment as Fed Chairman, after he was largely responsible for the 2008 financial crisis but was entrusted to “save” the U.S. economy from the crisis by doing more of what caused the problems in the first place.

Until policymakers get their heads out of their you-know-whats and realize the simple fact that it is impossible to solve a debt crisis by issuing more debt, the fiscal and economic problems in Greece and other countries will only get worse.