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German Parliament approves Greek debt deal

Published on NewsOK Modified: November 30, 2012 at 5:17 am •  Published: November 30, 2012

BERLIN (AP) — German lawmakers overwhelmingly backed a deal aimed at trimming Greece's debt load and keeping the country financially afloat but the country's finance minister insisted it would be irresponsible to raise hopes of more radical debt forgiveness soon.

Parliament voted 473-100 Friday to back the complex deal reached by European finance ministers on Tuesday after a marathon of negotiations. There were 11 abstentions.

The agreement paves the way for Greece to receive €44 billion ($57 billion) in critical rescue loans, without which the country would face bankruptcy and a possible exit from the euro.

It also contains measures including a debt buyback program and an interest rate cut on loans. Those are aimed at cutting back Greece's debts and giving it more time to push through economic reforms and trim its budget deficit.

However, it stops short of forgiving outright debt owed to lead creditor Germany and other eurozone governments. Chancellor Angela Merkel's government has strongly opposed a so-called "haircut" in the run-up to elections next year.

Finance Minister Wolfgang Schaeuble told lawmakers that the latest deal will keep the pressure on Greece to fulfill its promises and that blocking loan payouts would have all round Europe.

"We have always pushed the principle of conditionality, and that goes here too," Schaeuble said. "Greece will only receive all this relief if it continues to implement its reform measures, one after another."

Germany's Parliament has to approve eurozone rescue measures. The bailouts of Greece and others haven't been popular in Germany, Europe's biggest economy, and there has been growing unease in Merkel's center-right coalition.

Still, broad support was assured because two of Germany's three opposition parties voted largely in favor. They argued that Greece had to be kept afloat despite reservations about Merkel's insistence on a step-by-step and austerity-heavy approach to the debt crisis.

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