Posted: Nov 16, 2011 7:06 AM
Updated: Dec 13, 2011 8:15 AM
ATHENS, Greece (AP) - Greece is launching complex talks with international banks on a €100 billion ($135 billion) debt writedown, as parliament holds a confidence vote later Wednesday in a new coalition government tasked to save the country from a disastrous bankruptcy.
A finance ministry official said the head of the global banking lobby group negotiating Greece's debt reduction is due in Athens later in the day, while talks will be held over the phone with bankers in Paris and Frankfurt.
International Institute of Finance managing director Charles Dallara is expected to meet with Finance Minister Evangelos Venizelos following the afternoon vote in parliament, the official said, on customary condition of anonymity.
Interim Prime Minister Lucas Papademos, a former central banker appointed after laborious power-sharing negotiations last week, is expected to easily win the confidence vote. His government is backed by the country's two main parties - the majority Socialists and the conservatives - and a small right-wing party with nationalist leanings.
Greece is at the heart of a vicious debt crisis that has brought it to the brink of bankruptcy. In return for bailout loans, the previous Greek government had to force through a deeply resented austerity program, which has seen repeated cuts in pensions and civil service salaries coupled with a spate of tax hikes.
Since May 2010, the country has survived on installments from a €110 billion rescue loan package from its European partners and the International Monetary Fund. When it became obvious that even that sum was not enough, European leaders struck a new bailout deal last month, worth a total €130 billion. In addition, it was agreed that banks and other private holders of Greek bonds would write off 50 percent of their Greek debt holdings.
But last month's political turmoil in Athens delayed the release of the latest loan installment, worth €8 billion, without which Greece will go bankrupt before Christmas. The country's creditors insist the money can only be released after Greece formally accepts the new bailout, and rival party leaders provide written commitments to honor it - a demand that conservative leader Antonis Samaras has rejected.
While polls show popular support for Papademos' new government, Greeks remain deeply angered by 20 months of belt-tightening that have triggered a wave of general strikes and often violent protests.
On Wednesday, public electricity workers flipped the switch on the country's health ministry building in Athens for four hours to protest unpaid state bills to the utility.
Their union said the ministry owes the Public Power Corporation, or PPC, €3.8 million ($5.1 million) - out of a total €141 million ($191 million) state debt to PPC.
The PPC union is protesting a new property tax that is being levied through household electricity bills - with people who don't pay facing the prospect of having their power supply cut.
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