Greece Lowers Recovery Expectations

DEREK GATOPOULOS

ATHENS, Greece (AP) — Greece on Wednesday insisted a new €130 billion ($172 billion) bailout deal will "bind" it to the euro, but again lowered expectations of recovery as it faced skeptical world markets, continued protests and another downgrade of its debt deeper into junk status.

As the government scrambled to push new austerity measures, Finance Minister Evangelos Venizelos said the new rescue package approved by eurozone countries would shield Greece from default.

"The agreement is of historic importance, because it binds Greece to the euro," Venizelos told private Mega television.

"It was not only the approval of the €130 billion in additional support for Greece. But this also comes with a European commitment ... of support for as long as in necessary for Greece to return to the markets."

He added: "This is a decisive and irreversible action by our partners: Greece is a member of the euro and will remain a member of the euro and there is no issue of bankruptcy, there is no issue of the country's financial collapse."

Earlier, around 6,000 protesters chanting "EU out, IMF out!" marched through central Athens in a peaceful rally against the new austerity measures.

Eurozone countries on Tuesday approved the new bailout deal, and a €107 billion ($141 billion) debt writedown by banks and other private holders of Greek bonds.

In response, Fitch downgraded Greece's credit rating further into junk status, from 'CCC' to 'C' — one notch above default — while world markets appeared nervous at the prospects of forcing through new austerity measures in a country stuck in recession for a fifth year and with unemployment topping 20 percent.

Shares on the Athens Stock Exchange fell 5.67 percent to 751.96, as banks sustained heavy losses.

New austerity measures include slashing pensions and benefits, and cutting the minimum wage from €751 to €580 per month, defying pleas from unions and employers who argue warn the recession will deepen dramatically.