Greek PM hails debt compromise

REUTERS

A man takes photographs of the Parthenon temple as he stands outside the ancient Herodes Atticus theatre in Athens November 27, 2012. A bleary-eyed Greek Prime Minister Antonis Samaras welcomed on Tuesday an agreement by international lenders to help cut his country's debt and unblock bailout money to avert bankruptcy.

Related Stories

• Eurozone, IMF reach deal to cut Greek debt
• Greece, markets satisfied by debt deal

Greek Prime Minister Antonis Samaras welcomed a debt deal agreed by lenders to unlock aid, promising sceptical Greeks a new dawn after months of haggling under the threat of bankruptcy.

Worn down by political squabbling and repeated austerity cuts, many Greeks reacted to the deal with disdain while the Syriza opposition party called it a “half-baked compromise” that would not solve the country's problems.

“So what?” asked Nikos Kamoudis, 60, a shoe repairman in central Athens whose business has suffered from the recession.

“At the end of the day if you have no money in your pocket to feed your family and pay your bills it doesn't matter what decisions they take up there.”

After 12 hours of talks at their third meeting in as many weeks, euro zone finance ministers and the International Monetary Fund to reduce Greek debt by 40 billion euros ($52 billion), opening the way for 43.7 billion euros of loans to be disbursed by early 2013.

“Everything went well,” Samaras told reporters outside the prime minister's mansion at about 3 a.m. in the morning.

“Tomorrow, a new day starts for all Greeks,” he added.

A poll published on Monday before the deal showed 84 percent of Greeks felt uncertainty would persist even with the disbursal of money and only 10 percent thought it would save the country.

Greek newspapers were split along party lines on the deal. Greece's top-selling daily Ta Nea showed a smiley face on its front page next to the headline: “The first smile for Greece” while the Six Days daily called it “a disastrous compromise”.

Greece's main stock market index initially rose on the news, but dipped in early afternoon trade as bank stocks tumbled over 10 percent on fears that a debt buyback plan might further erode their battered capital.

“The positive side is that we've been given some oxygen to continue breathing for a period of time and finally see a stop to this haggling on getting and not getting the tranche,” said Takis Zamanis, chief trader at Beta Securities.

“On the other hand, concerns remain on how the buyback will proceed and under what terms. It seems the banks are worse off.”

International financial markets were more reassured. The euro hit a one-month high, and European stocks rose 0.5 percent by 10:53 SA time.

“NEW START”

After months of infighting over unpopular austerity measures that the government was forced to pass to appease aid, all three parties in Samaras's coalition government cheered the deal.

“This is the new start the country needs after nine months of waiting,” said Evangelos Venizelos, leader of the co-ruling PASOK Socialists. “Now it's up to us to make it work.”

The other junior coalition partner, the Democratic Left, called the deal “a decisive step” to keep Greece in the euro.

Deeply unpopular wage and spending cuts passed this month contradicted Samaras's pre-election pledges to soften the bailout deal, testing the cohesion of the conservative-led, three-party coalition he has headed since June.

Greece's anti-bailout opposition dismissed the agreement altogether, saying it fell short of what was needed to make the country's debt sustainable.

“It's a half-baked compromise, a band-aid on the gaping wound of [Greece's] debt,” said Dimitris Papadimoulis, senior lawmaker of the radical leftist Syriza party, the biggest opposition party which is leading in the polls.

Papadimoulis said German Chancellor Angela Merkel was standing in the way of a 50 percent write-off of Greece's 340-billion-euro debt, saying that was what Athens needed.

“(The deal happened) under pressure from the narrow-minded, egotistic, short-sighted economic policies of Merkel, who stingily watches over her money,” he said. - Reuters