Elections to determine Greece's future for decades: PM

Elections on Sunday will define Greece's future for decades to come, outgoing Prime Minister Lucas Papademos said Wednesday, urging his successors to stick by unpopular and vital austerity measures.

"Greece's strategic course will be determined in these elections, its future for the coming decades," Papademos told the final cabinet meeting of his coalition government.

In November, 64-year-old Papademos, a former vice-president of the European Central Bank, was brought in as a non-partisan safe pair of hands to steer Greece through its debt crisis and prevent bankruptcy and possible eurozone ejection.

As the head of a rare power-sharing coalition that included the socialists, the conservatives and initially the far-right nationalists, Papademos helped finesse an unprecedented bond swap that reduced Greece's debt mountain by a third.

Along with this move, reducing the debt to 350 billion euros ($464 billion), Papademos also negotiated a new eurozone loan of 130 billion euros to help cover the country's financing needs for the coming years.

The price however was a painful raft of austerity measures aimed at slashing government spending and raising taxes, as well as an ambitious programme of privatisations and clamping down on tax evasion.

"The main mission of the government is complete," Papademos said on Wednesday.

"Greece has avoided the immediate threat of bankruptcy and the best possible conditions have been created -- albeit particularly difficult ones -- to continue the effort to reconstruct the economy," he said.

Two years of austerity cuts have been accompanied by a deepening recession that has left over a million jobless in Greece.

Two Greek newspapers reported Wednesday on a prime ministerial document that listed dozens more reforms that need carrying out for Greece to meet its creditors' obligations, including fiscal and judicial reforms.

But the gloom lifted slightly Wednesday when credit rating agency Standard & Poor's took Greece out of "selective default" status even though the bond swap meant many investors were forced to take losses against their will.

Some were even able to claim 2.5 billion euros in default insurance.

In his parting message, the Harvard professor urged his successors to help enforce the 48 laws and international agreements adopted by his administration in the space of five months, until parliament was dissolved in April.

"I think it's the largest number of laws voted in five months," he said.

"We all agree that laws are important and effective when they are applied. Past experience is often discouraging (on that count)," he noted.

Papademos has given no indication on his future plans after politics.

Analysts say he could yet be asked to return to head a new coalition after the elections, which are considered unlikely to produce a majority government.


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