February 11, 2012
Greek Prime Minister Lucas Papademos won Cabinet approval for deeper budget cuts needed to secure a second package of international aid, preparing the way for parliamentary vote in his race to prevent financial collapse.
The 287-page document was approved unanimously, said a government official who declined to be named. The backing means parliament will probably vote tomorrow on budget measures equal to 7 percent of gross domestic product over the next three years and a debt swap to cut 100 billion euros ($132 billion) off more than 200 billion euros of privately-held debt.
“The social cost this program implies will be limited compared to the economic and social catastrophe that would follow if we don’t adopt it,” Papademos told his ministers earlier, according to a transcript of his comments. “The completion of the program and financial support will cement our country’s future in the euro area.”
The support capped a week of tension as European Union and International Monetary Fund officials argued with Greek officials over the conditions to secure a 130 billion-euro ($172 billion) rescue package. Papademos on Feb. 9 reached an accord with leaders of the three parties supporting his interim government hours before a crucial meeting of euro-area finance ministers in Brussels, only to be told it needed more work.
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