PM says Greek pension funds won't join debt buy-back

Sat Dec 1, 2012 3:23pm EST
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By Renee Maltezou

ATHENS (Reuters) - Greek pension funds will not take part in a debt buy-back that is a key part of the country's international bailout, Greek Prime Minister Antonis Samaras said in a newspaper interview.

Greece must conduct the deal by December 13, before it receives more than 30 billion euros ($39 billion) in bailout payments from the euro zone and the International Monetary Fund.

Athens has said it is vital the buy-back is successful, but it must attract enough interest from bondholders, who need to decide whether to participate in the process, to ensure the country's debt is deemed viable in the coming decade.

"The debt buy-back does not concern the pension funds," Samaras was quoted as saying in an interview with Sunday's Proto Thema newspaper.

"We wouldn't erase the debt even if we took the funds' bonds. These are seen as arrears of the state to itself."

Greek pension funds hold more than 8 billion euros out of a total 63 billion euros of Greek bonds held by private investors. Greek banks are estimated to hold nearly 17 billion euros.

Most of their capital has already been wiped out by a debt cut in March and they must be recapitalized with more than 40 billion euros in bailout funds.

The government is expected to unveil the terms of the deal on Monday before a meeting of euro zone finance ministers. So far, international lenders have agreed the bonds would not be purchased for more than the closing price on November 23.   Continued...

Greece's Prime Minister Antonis Samaras delivers his speech during a business presentation organised by the youths of his conservative New Democracy party in Athens November 20, 2012. REUTERS/John Kolesidis