Greece’s parliament was expected to endorse a debt swap with private bondholders that forms the core of its 130-billion-euro bailout, despite new protests against tough budget cuts demanded in return for the rescue deal.
The swap, in which private investors exchange their bonds for lower-value debt, will slice US$132 billion off Greece’s debt, a vital part of the EU and IMF rescue plan aimed at cutting Greece’s liabilities from 160 percent of gross domestic product to 120.5 percent by 2020.
Greece’s second bailout since 2010 was approved by euro zone finance ministers on Tuesday, averting the immediate threat of a messy bankruptcy next month but doing little to allay deep doubts about the country’s long-term financial and social stability.
With the ruling alliance of Socialist PASOK and conservative New Democracy having a comfortable majority in parliament, there is little suspense over the passage of legislation which already went swiftly through the committee stage on Wednesday.
But new protests are planned on Thursday against 3.3 billion euros of budget cuts this year demanded in return for the rescue package, and left-wing parties opposed to the austerity package are gaining in opinion polls before elections likely in April.
«You put the debt swap in front of us like a piece of cheese on a mousetrap, which is 10 years of hardship,» Dimitris Papadimoulis of the Left Coalition party told parliament.
Doctors and health workers joined the wave of public anger on Thursday, launching a 24-hour strike over pay cuts and calling a protest outside the Health Ministry. Hospitals were maintaining a minimum level of service.
«We condemn the policy of the government, the EU and the IMF, which is demolishing the state healthcare and killing its personnel,» hospital doctors from Athens and the port city of Piraeus said in a statement.
The exact timing of the final vote on Thursday was unclear.
The government says the offer must be made to bondholders by Friday and completed by March 12, before a March 20 deadline when 14.5 billion euros of debt repayments fall due.
Private investors holding about 200 billion euros of Greek bonds will take a loss of 53.5 percent in the face value of their holdings and a real loss of 73-74 percent.
The legislation says investors get at least 10 days to consider the transaction and creates so-called «collective action clauses» (CACs), which force all bondholders to proceed with the swap once it has won a specified level of approval.
According to the draft law, the swap will go ahead once a 50 percent quorum of bondholders have responded to the offer and the CACs will be activated once a two-thirds majority of that quorum have voted in favor of the swap.
buenosairesherald.com