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Greek PM Hails Achievement of Bond Swap Deal With Lenders

Greek Prime Minister Lucas Papademos attends a cabinet meeting at the Greek Parliament in Athens, March 9, 2012.
Greek Prime Minister Lucas Papademos attends a cabinet meeting at the Greek Parliament in Athens, March 9, 2012.

Greek Prime Minister Lucas Papademos has hailed the success of the bond swap deal with private lenders to keep the country solvent.

During a speech on state television Friday, Papademos said, "for the first time, Greece is not adding, but taking debt off the backs of its citizens for generations to come."

Under the agreement, Greece says the majority of the country's private lenders, including financial institutions, have agreed to a bond swap deal to help it eliminate a $142 billion debt and avoid a default on its financial obligations later this month.  Greece intends to use legislation to force the remaining holdouts to sign on to the agreement.

Following a meeting of Cabinet ministers in Parliament, Development Minister Anna Diamantopoulou said she will now focus on improving the business relations in Greece.

"My first priority now is liquidity in the market and change in environment, in the business environment, as soon as possible," said Diamantopoulou.   

Greece has adopted widespread austerity measures, cutting wages and pensions and eliminating thousands of government jobs to meet the demands of international lenders so it could secure a new $172 billion bailout.  The rescue package is the country's second in two years.

With Greece planning to pay back the remaining debt it owes to the financial institutions over an extended period, those who bought the Greek bonds will ultimately lose about three-fourths of their investments.  

Some information for this report was provided by Reuters.

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