NEWS

Parliament approves debt swap deal

MPs take first step to endorsing loan deal; vote on implementation, pension cuts due on Wed

Parliament on Thursday took the first step toward endorsing a new debt deal with the country?s foreign creditors, approving a bond swap with private bondholders which underpins the whole agreement and would relieve the country of more than 100 billion euros of its debt burden.

The official public offer to bondholders is to be made today with the aim of completing the procedure by March 12.

With the two parties in the ruling coalition, Socialist PASOK and conservative New Democracy, enjoying a comfortable majority, and as no request was made for a vote by roll call, the law passed automatically.

Meanwhile Parliament?s social affairs committee approved a second bill which details the implementation of austerity measures and reforms that already have been approved and imposes another 3.2 billion euros in extra measures including cuts to pensions. That bill is to be voted on next Wednesday.

Finance Minister Evangelos Venizelos said the approval of the debt swap deal -- known as PSI (for private sector involvement) -- ?will allow us to start emerging from the maelstrom.? ?But to succeed, we need to be united, serious, trustworthy, persistent and to work, work, work,? he said.

Foreign officials went further. Mario Draghi, the head of the European Central Bank -- one of Greece?s three official foreign creditors, along with the European Commission and the International Monetary Fund -- said in comments published in Germany?s Frankfurter Allgemeine Zeitung that Greece?s compliance with the terms of a new debt deal must be ?flawless? for it to avoid worse trouble.

Government spokesman Pantelis Kapsis insisted that authorities are ?determined to take all the measures necessary for the agreement to proceed as planned.?

In comments to state television channel NET, he added that additional measures for 2013 and 2014 would be discussed in June, when a new government is expected to be in place following elections set for April.

Both the two main parties are gearing up for snap polls. Kathimerini understands that Venizelos, the key challenger for the PASOK leadership, is to inform party cadres in coming days of his intention to run for the post. It is thought that Venizelos will not quit as minister until the PSI process is complete. He and Prime Minister Lucas Papademos are expected to discuss the matter soon.

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