Former Italy treasury minister Tommaso Padoa-Schioppa will advise Greek Prime Minister George Papandreou, helping guide the country's austerity programme under a multi-billion euro EU/IMF bailout.
"He will offer advice to the prime minister on matters of political planning relating to the implementation of fiscal and structural policy as part of the European support mechanism," Papandreou's office said in a statement.
Padoa-Schioppa was a minister in Italy's centre-left government from 2006 to 2008 and a former policy maker at the European Central Bank (ECB).
"This is a positive choice," said Gikas Hardouvelis, chief economist at Greek lender EFG Eurobank. "He has held senior positions and knows how macroeconomics and financial markets work."
Hardouvelis was economics adviser to former Greek Prime Minister Costas Simitis who steered the country into the euro zone in 2001.
Greece has been in the eye of the storm since revealing in October last year that its budget deficit was twice as big as previously estimated. After failing to convince markets it could handle its massive debt pile it was saved from bankruptcy in May via a multi-billion euro EU/IMF bailout.
It successfully placed T-bills last month, although at a high price, and has said it wants to return to markets for longer maturity bonds sometime next year.
Athens has managed to slash the budget deficit by 45 percent in the first half, boding well for its year-end target to bring it down to 8.1 percent of GDP and has passed a key structural reform, overhauling the ailing pension system.
The government needs to implement more reforms, including the opening up of closed professions, to make the economy more competitive and stay the course on fiscal adjustment to continue to get funding under the support scheme.
Padoa-Schioppa, 70, has served as director-general for economy and finance at the European Union, vice director-general of the Bank of Italy, president of Italy's bourse watchdog Consob, and president of the IMF's monetary and finance committee.
He was part of the ECB executive committee from 1998 to 2006 and served as economy minister in the government of Romano Prodi from 2006 to 2008.
