Greek PM urges acceptance of austerity

ATHENS -- In a televised address, Greece's prime minister defended austerity measures Saturday that include painful wage and pension cuts but would ensure the country receives a $170 billion bailout deal and stave off bankruptcy.

Lucas Papademos made the comments on the eve of a parliamentary debate and vote on emergency legislation approving the new bailout and a debt-swapping deal with private creditors. The debate began at committee level Saturday afternoon. Further legislation will be up for vote a few days later.

Papademos said the alternative to austerity is catastrophic bankruptcy -- echoing comments made earlier by the leaders of parties backing Greece's coalition government -- socialist George Papandreou and conservative Antonis Samaras.

"The deal will ensure our country's future inside the [eurozone] . . . Bankruptcy would lead to uncontrollable economic chaos and social explosion," Papademos said.

He added that under bankruptcy Greeks would lose their savings, the state would be unable to pay for salaries and pensions and there would be shortages in import items such as medicines, fuel and machinery.

Elections are due in October 2013, but Samaras called for an immediate vote once the bond swap deal with Greece's private creditors is over, saying he would not agree to the extension of the mandate of the coalition government beyond that date.

The bond swap deal with Greece's private creditors is expected to help Greece get rid of around $130 billion of its debt. The bond swap must be completed before March 20, the redemption date for $19 billion worth of bonds.