“This is not only a day of satisfaction, but also of reflection”...

“This is a day of satisfaction and reflection”, PM Lucas Papademos declared in a brief statement on the occasion of the successful completion of the exchange bonds and increased participation in the PSI.

He described the haircut as a practical recognition of the country’s efforts to tidy up the economy and strengthen its competitiveness.

The Prime Minister spoke of a hopeful prospect out of the crisis, stressing that “We accept responsibility for determining the course of the country… we have a great new opportunity and we should not miss it”, he said.

The PM’s statement:

"Upon completion of the largest debt restructuring ever achieved, it opens a window of opportunity and hope for Greece. This is a major and I would say an historic success, made possible by the systematic and coordinated efforts of many. With the help of our partners, with the sacrifices of the Greek people and the cooperation of the political forces supporting the government, we concluded a very difficult task.

Upon completion of the remaining steps, the final approval and signing of loan agreements for the next two weeks, we are moving away from the quicksand of the past months. We are on solid ground now. For the first time Greece is not adding to its debt, but removing public debt from the backs of its citizens and future generations. By reducing the debt by about 105 billion euros, the Greeks can see the future with greater confidence.

Today is not only a satisfying day for what has been achieved. It is also an opportunity for reflection. Because we know that those who save money and the investors, including thousands of ordinary citizens of this country, suffered significant damage [financial loss]. And that requires us to think about our mistakes, which forced us to lead towards the restructuring of debt. This also reinforces our will and our determination to change Greece.

Debt restructuring is a practical recognition of the efforts of Greece. It is an expression of confidence in the prospects of the country and our future in the Eurozone. It creates the conditions for the return of deposits, for investments, for taking the economy forward, for creating jobs for young people. We still have before us an uphill climb. The money you save on interest and amortization, we have no right to squander. We need to utilize and modernize the structures of the country, to make our economy competitive, to tidy up the state.

Through the deep recession and tribulations of the Greek people, a promising prospect is emerging of leaving behind the worst crisis of the postwar period. Trust is restored. The support of our partners is confirmed. But ours is a crucial responsibility to shape the course of the country. To change our economy, to keep our society upright, to defend our position in the euro, to win the future. We have a new opportunity. Let us not lose it."

Earlier on, the Cabinet had decided to embark on a study of proposals for new spending cuts over the next two years. The study will include proposals which will be given to the next government, on the basis of which costs will be reduced by three billion in 2013 and a further three billion in 2014.

Earlier in Parliament, Finance Minister and Deputy Prime Minister Evangelos Venizelos had admitted that "we will probably produce debt in 2013 too," referring essentially to achieving the primary surplus target in 2014. He, however, described the success of the PSI as a sign of confidence in the prospects for recovery of the Greek economy.

Note that currently, the Greek Statistical Authority announced an even greater downturn - namely 7.5% instead of 7% - for the fourth quarter of last year.