Athens (dpa) – Greece passed an economic milestone with its bond swap deal on Friday after securing agreement from the vast majority of its bondholders to accept losses, thus averting the risk of a default on its debt by the end of the month. But with unemployment at a record 21 per cent, and a stagnant economy currently in its fifth year of recession, Greeks were not dancing in the streets in celebration. “Nice haircut – it suits you!!” read the ironic headline on Ethnos. Meanwhile, Ta Nea's front page carried the headline: “There is no reason to celebrate – the economy has to work full-speed ahead.” Finance Ministry officials rejoiced after 85.8 percent of private investors holding 177 billion euros in bonds issued under Greek law signed up to the debt swap deal, or haircut, which will slash the country's 350-billion-euro debt by 105 billion euros. The deal – in which investors were asked to accept an effective loss of around 70 percent – is a precondition for the release of a second 130-billion-euro international bailout agreed last month. If the swap deal had failed, Greece faced the risk of defaulting on its debts by the end of this months. “We have achieved an exceptional success and I believe everyone will understand that this is the only way to keep the country on its feet and give it the second historic chance that it needs,” Finance Minister Evangelos Venizelos told parliament. “After a very long time this is a very good day. The country has got rid of over 100 billion euros of debt,” he added. Despite the government's success, few found it was enough to solve the biggest economic crisis the country has seen in decades. Greece is laboring under a debt equivalent to 160 per cent of its gross domestic product. The haircut, together with a massive package of pension, salary and public sector cuts, aims to reduce the national debt 120.5 per cent of GDP by 2020. “The government is sending out the message to Greeks that tomorrow will be much better than yesterday. But without growth, competitiveness and a primary surplus in the budget, how will this happen?” Yannis Monogios, a researcher at the Center of Planning and Economic Research told dpa. On the streets of Athens, many were skeptical whether the debt swap would make any difference. “Good for us? How can it possibly be good for us when they are cutting our pensions and salaries,” said Pantelis Soulis, an unemployed car mechanic. Christos Kyriakourisis, a taxi driver said: “It will take a long time to actually see the benefits of this deal. In the meantime the average Greek is more concerned with putting food on the table and does not understand the complexities of the debt swap. He is more concerned with rising unemployment.” Savvas Robolis, representing Greece's largest private sector union, GSEE, warned the jobless rate would climb to 25 percent this year, twice the euro zone average, with 51 percent of young people unemployed. “Even with the debt swap Greece is still left with too much of a debt burden for a small country to handle, and the austerity policies of the government are not solving them, rather they are making it worse.” BM ShortURL: http://goo.gl/xG0fh Tags: debt, Greece, Jobless, Workers Section: Business, Europe, Latest News
