Greek pension funds to decide on debt rollover

AFP, Tuesday 6 Mar 2012

Greek govt calls holders of state debt to decide whether to join debt swap initiative aiming to cut 107 billion euro from Greece's total 350-billion-euro debt mountain

Protesters shout slogans during an anti-austerity rally by employees of the Workers' Housing Organisation in front of the parliament in Athens (Photo: Reuters)

Greece's struggling pension funds faced a decision on Tuesday on participating in a huge state debt swap which unions say means disaster for the savings of millions of pensioners.

The Greek government has given holders of state debt until Thursday to decide whether to join the initiative, which aims to cut 107 billion euros ($142 billion) from Greece's total 350-billion-euro debt mountain.

The civil servants' union Adedy has scheduled a protest at its own pension fund, Teady, later on Tuesday.

"We call on fund boards to refrain from a new crime against their members," the union said, terming the debt write-down "a coup de grace to fund reserves."

Greek Finance Minister Evangelos Venizelos last month told parliament that pension funds hold 27 billion euros in state debt, and that these holdings were fully protected.

"Debt restructuring will not affect pensions," Venizelos said.

"Each year the state gives the funds over 13 billion euros in subsidies," he said. "Hence, in two years, the state budget pays out the entire value of their holdings...we will restore fund possessions to the full."

The debt rollover, supported by a major bank association, is tied to a 130-billion-euro eurozone bailout that will enable Greece to avert default in two weeks when it must repay a maturing bond worth over 14.4 billion euros.

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