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Greece Piles on Debt to Reach Deal on Medical Supplies for Hospitals

by Tanya Thomas on June 17, 2010 at 10:33 AM
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 Greece Piles on Debt to Reach Deal on Medical Supplies for Hospitals

On Tuesday, Greece's debt-ridden government was able to conclude a deal on payments to medical suppliers, a minister confirmed. This could potentially end the dispute that unions warned could put patients' lives at risk.

"We proposed today and there was an agreement in principle on the pay-off of state debt to providers," Finance Minister George Papaconstantinou said.


The deal will go to parliament this week and comes a day after Moody's slashed its sovereign rating for Greece to "junk" status on concerns about how Athens can repay its debts.

A meeting with providers on Monday had failed to reach a settlement, raising the possibility of critical shortages at Greek hospitals since suppliers had frozen deliveries over the debt, which dates to 2005.

Health Minister Marilyza Xenogiannakopoulou accused medical goods suppliers of "blackmail" as the government seeks to end years of waste and fraud in the hospital sector.

Unions called for an immediate settlement to avoid putting patients' lives at risk, with a wide range of goods from cotton to pacemakers affected.

Under the deal reached on Tuesday, the government will pay a total of 490 million euros (604 million dollars) for 2005 and 2006. It had already paid 1.2 billion euros in December for those two years and a part of 2007.

Debt for 2007, 2008 and 2009 will be covered by issuing treasury bonds worth 5.35 billion euros.

The government has also committed to paying 100 million euros -- or 200,000 euros for each company involved -- because of "several firms' treasury difficulties due to late payments," said Papaconstantinou.

Greece's government is struggling under a mountain of debt and has been granted a 110-billion-euro rescue deal by the European Union and International Monetary Fund.

The crisis in Greece spilled over into other weaker eurozone countries such as Spain and Portugal, with Brussels and the IMF agreeing a one trillion dollar backstop package last month in an effort to hold the line.

Source: AFP


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