Greece: stocks up but opposition blasts debt deal

By Theodora Tongas

Associated Press

Published: Thursday, Oct. 27 2011 6:55 a.m. MDT

A pedestrian passes a vendor selling Greek flags ahead of a national holiday later this week, in Athens, Wednesday, Oct. 26, 2011. European leaders meeting later Wednesday in Brussels are expected to shore up the eurozone bailout fund to contain the continental debt turmoil and prevent Greece from a catastrophic default.

Thanassis Stavrakis, Associated Press

ATHENS, Greece — Shares on Greece's stock market rose sharply Thursday following a debt deal reached by European leaders, but opposition parties blasted the landmark agreement, with conservatives warning it condemned the country to "nine more years of collapse and poverty."

In mid-afternoon trading, shares on the Athens Stock Exchange joined a surge in world markets and were up 5.74 percent at 818.23, with banking stocks up nearly 12 percent — after suffering heavy losses earlier this week.

Greece's sky-high rates for long-term borrowing and default insurance also eased slightly.

The deal requires banks to take on 50 percent losses on Greeks bonds. Eurozone countries and the International Monetary Fund will also provide an additional €100 billion ($140 billion) in rescue loans as a second bailout package for Greece.

"We have avoided a mortal national danger," Socialist Prime Minister George Papandreou told a news conference in Brussels after the night-long negotiations.

"Today we have the ability to close our accounts with the past," he said. "A burden from the past has gone, so that we can start a new era of development, on our own steam."

Greece's troubled €230 billion ($320 billion) economy is heading into a fourth year of recession, with unemployment at 16.5 percent and taxpayers struggling to cope with a barrage of new taxes on property, purchases and their shrinking incomes.

The Socialists have 153 seats in the 300-seat parliament, its majority whittled down from 10 seats over two years by opposition to the harsh austerity measures that have triggered frequent strikes, mass protests and violent demonstrations.

Conservative opposition leader Antonis Samaras said the debt deal "perpetuated" mistakes that drove the country into recession.

"We are not closer to the solution, but are faced with nine more years of collapse and poverty. Neither the economy nor society can withstand this," Samaras said.

Prominent left-wing deputy Dimitris Papadimoulis said the agreement would doom Greeks to a deeper recession.

"The deal puts Greece in a eurozone quarantine," he said. "We are now locked in a system of continuous austerity, haphazard privatization, and continuous supervision by our creditors."

He also noted an inherent conflict of interest in the European debt plan.

"Those who monitor us do not have our interests in mind. Their priority is that we pay back our loans," Papadimoulis said.

Some analysts also appeared critical of Thursday's deal, worried that it might failed to improve the sustainability of Greece's €350 billion ($490 billion) national debt.

"There's absolutely nothing in the package that was agreed that gives us even a modicum of hope that anything along the lines of (economic) development is happening," Yanis Varoufakis, professor of economics at the University of Athens, told AP television.

"We have more austerity and more wishful thinking in terms of how much liquidity can be extracted from the Greek economy, either through privatization or through taxation, in order to pay for these deals," he added.

In the northern city of Thessaloniki, the government did not send a representative to an annual high school parade, a day after anti-austerity protesters there heckled and threw eggs at the country's defense minister.

AP writer Costas Kantouris in Thessaloniki contributed.

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