Greece granted second chance to tackle debt crisis: FinMin

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Greece granted second chance to tackle debt crisis: FinMin

Greece avoided the nightmare scenario of a possible default as early as next month and was granted a second chance to tackle the debt crisis with the strong support of European counterparts, Finance Minister Evangelos Venizelos said on Tuesday.

Greek Finance Minister Evangelos Venizelos speaks at a press conference in Athens, Greece, Feb. 21, 2012. Greeks greeted uneasily the news on Tuesday that their country will likely avoid defaulting on its debts next month. (Xinhua/Marios Lolos)

"We avoided a nightmare scenario, for Greece, the eurozone, Europe and global economy," he told a press briefing in Athens upon his return from Brussels.

Just a few hours ago euro group had cleared a fresh 130-billion-euro (172.33 billion U.S. dollars) rescue loans package for Greece combined with an over 100 billion euro (132.56 billion dollars) worth Greek debt restructuring agreement with private creditors, known as Private Sector Involvement (PSI) plan.

"The agreement gives Greece a new opportunity," Venizelos stressed referring to the second European Union (EU)/International Monetary Fund (IMF) bailout package for Greece since May 2010 that gives the country vital aid to cover its financial needs, avoid a chaotic bankruptcy and restore stability and development to exit the crisis.

Without the new loans, Greece would not manage to cover a 14.5-billion-euro (19.22 billion dollars) bond repayment on March 20.

Greece is shut out of international markets since 2010 due to extremely high interest rates and depends on the EU/IMF bailout assistance that comes on lower interest rates.

Greece must work hard without wasting time to implement the stability and growth program and meet its commitments in return, Venizelos underlined.

Despite some positive steps, the country has been criticized by creditors for missed targets regarding deficit-cutting policies and reforms to boost growth.

In a first step, during a cabinet meeting underway on Tuesday evening, a draft bill on the implementation of the final terms of the deal and the PSI plan was expected to be approved and submitted to parliament for a vote scheduled for later this week ahead of a new EU summit on early March.

By the weekend, according to the latest information by government sources, Greece is also due to make a formal offer for the Greek debt swap that is expected to be wrapped up by mid March.

Venizelos noted that the final PSI plan for the voluntary write off of part of the Greek state debt owned by private holders of Greek bonds, is an improved version of the framework set out at the Oct. 26 eurozone summit.

Eventually private bondholders agreed to cut the value of the debt they own by 53.5 percent up from the initial goal of 50 percent to secure the sustainability of the Greek debt by 2020.

Regarding the recapitalization of the Greek banking sector, another key part of efforts to address the crisis, the Greek official said that a total 50 billion euros (66.28 billion dollars), up from 40 billion euros (53.02 billion dollars) initially estimated, could be required to safeguard the sector's stability.

He repeated a plea to Greek citizens who over the past two years have withdrawn 65 billion euros (86.16 billion dollars) from local banks fearing a financial meltdown, to return their money and "support the banking system and the national economy."

VietNamNet/Xinhuanet

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