Greek Cabinet formally approves bailout deal

Friday, 16 March 2012 00:01 - - {{hitsCtrl.values.hits}}

ATHENS (Reuters): Greece’s cabinet unanimously approved the terms of its international bailout on Wednesday, hours after euro zone countries formally approved the 130 billion euro financial package that Athens needs to stay afloat.

The deal to keep Greece funded until 2014 will now be sent for approval to the Greek parliament, which is expected to vote on it by the end of the month.

The bailout ends months of uncertainty for debt-stricken Greece, which secured the package only after agreeing to a series of painful austerity measures and a successful debt swap that imposed losses of as much as 74 percent on bondholders.

“A lot remains to be done,” Prime Minister Lucas Papademos told the cabinet, according to a statement, adding that parliament needs to pass an additional eight bills linked to the bailout deal.

“The cabinet and parliament must undertake a great effort to complete this legislation in the coming weeks,” he said.

The Greek cabinet backed the terms tied to bailout funds it will receive from the European Union. The International Monetary Fund is expected to approve its share of the bailout, set at 28 billion euros, later this month.

Papademos has said he would step down once the legislation is completed, paving the way for general elections, which are expected to be held at the end of April or early May.

Finance Minister Evangelos Venizelos, who led negotiations on the bailout, also confirmed on Wednesday that he would step down from his post once he is elected chief of his PASOK socialist party. The move had been widely expected.

“Once I take over at the helm of the biggest party in parliament, I will have to devote myself to these new duties,” he told the Alpha television channel in comments to be aired later on Wednesday.

He predicted elections would be held in about six to seven weeks -- in line with comments by other government officials.

PASOK, which has backed much-hated austerity policies demanded by foreign lenders, is expected to take a beating in the polls. But many pollsters predict it will eventually strike a deal with the New Democracy conservatives to form a new government. Both parties are part of Papademos’ government.

Greece’s cabinet also approved a fiscal pact agreed by EU leaders earlier this month. It is not clear yet whether parliament will also have to ratify the deal.