Greeek MPs approve £90bn rescue deal

 

The Greek Parliament today approved a massive bond swap that will wipe €107 billion (£90 billion) off the country's privately held debt.

The emergency bill was passed by a show of hands in an almost empty House as the two main parties that back Prime Minister Lucas Papademos' governing coalition stated their support for the swap deal.

"The law is approved by majority," deputy Parliament speaker Tassos Kourakis said.

Greece is now expected to launch a formal offering to private bondholders on Friday. They will have 10 days to respond on whether they will take part in the exchange.

The writedown to be imposed on banks, pension funds and other private holders of Greek government bonds was agreed upon this week by finance ministers from the 17-member eurozone.

The meeting in Brussels also approved a new 130 billion euro (£110 billion) bailout to prevent Greece from going bankrupt and keep the country within the euro area.

Finance minister Evangelos Venizelos said he hoped the new agreement on rescue loans would be signed and validated by the end of March.

Speaking in Parliament ahead of the vote, Mr Venizelos insisted that ratifying the bond swap was the only way forward, and the alternative would be catastrophic, setting Greece back decades.

"The true dilemma is: either sacrifices with prospects, or complete destruction with no prospects. Either cuts which are harsh... or the inability to pay salaries and pensions. Either reduction of fortunes, or a complete loss of fortunes. Either high unemployment or generalised unemployment," he said.

He added: "Now Greece is obtaining a window of opportunity. We must make the most of it. We have not finished. We are starting again with better terms. We mustn't repeat mistakes, we mustn't have delays... We must complete the implementation of the programme."

Greece has been surviving since May 2010 on a first batch of international rescue loans as it became unable to finance its huge debt load.

But more than two years of harsh austerity implemented to secure the rescue funds have left the economy in freefall, with businesses closing in the tens of thousands and unemployment at a record high of 21% in November.

In its latest projections, the European Commission forecast a 0.3% contraction in the eurozone economy this year, with Greece leading the way down with a massive 4.4% decline. That would be the fifth straight year of recession in Greece.

The debt relief deal will force private bondholders to exchange their devalued Greek government bonds with new ones with a 53.5% lower face value, longer maturities and lower interest rates - an average 3.6%, compared with the previous 4.85%.

The bill includes collective action clauses that, if activated, will allow a majority of bondholders favouring the swap to impose their decision on holdouts.

Mr Venizelos wants the deal to be completed by March 12, two days before the country starts to run out of cash.

AP

Start your day with The Independent, sign up for daily news emails
Sport
tennisLive: Follow all the updates from Melbourne as Murray faces Czech Tomas Berdych in the semi-final
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
Arts and Entertainment
Taylor Swift is applying to trademark song lyrics from 1989
musicYou'll have to ask Taylor Swift first
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Joel Grey, now 82, won several awards for his role in Cabaret
people
Sport
Harry Kane celebrates scoring the opening goal for Spurs
footballLive: All the latest transfer news as deadline day looms
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Creative Marketing Executive - London - £32,000

£28000 - £32000 per annum: Ashdown Group: Creative Marketing Executive (Stand...

Tradewind Recruitment: Maths Teacher

Negotiable: Tradewind Recruitment: Our exclusive client in St Albans Hertfords...

Tradewind Recruitment: KS2 Primary Teachers

Negotiable: Tradewind Recruitment: Key Stage 2 Teachers needed in Hertfordshir...

Ashdown Group: Finance Manager - ACCA/CIMA - St Albans, Hertfordshire

£55000 - £58000 per annum: Ashdown Group: A truly exciting opportunity has ari...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness