Minister clinging on to his position

Labor Minister Savvas Tsitouridis survived questioning by opposition MPs yesterday, as sources suggested that Prime Minister Costas Karamanlis is now unlikely to sack his beleaguered aide. Tsitouridis faced a parliamentary committee and was asked a series of questions about the investments made by pension funds in the wake of allegations that some funds had been sold overpriced bonds. The minster defended the tactic of pension funds investing in structured bonds, which are riskier than traditional notes. The 280-million-euro bond at the center of the current scandal carried a fixed rate of return of 6.25 percent for the first two of its 12 years but offered a variable coupon for the remaining 10 years. When asked why the law was not changed to prevent funds from investing in structured bonds, Tsitouridis admitted that the relatively new investment product had caught the government unprepared. «At first, we thought they had guaranteed returns like traditional bonds,» said the minister. Sources close to the prime minister suggested that following Tsitouridis’s appearance before MPs yesterday, pressure on the minister might begin to ease. This has encouraged Karamanlis not to sacrifice the minister, sources said. Tsitouridis showed no signs of being willing to step down. «I have been asked to do a job and I am doing it,» he told journalists.

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