Greek debt swap to cut 2012 deficit to 5.4 percent of GDP (Reuters)

ATHENS (Reuters) ? Greece's government forecasts a budget deficit of 5.4 percent of GDP next year, provided a planned debt swap to reduce the country's debt maintenance costs goes ahead, according to a final budget plan submitted to parliament on Friday.

Excluding the effects of the debt swap, also known as the "PSI," the budget predicts that Greece's fiscal gap will be 6.7 percent of gross domestic product next year, down from 9.0 percent in 2011.

Under the debt swap plan, Greece said in the budget it expected to issue new bonds with a nominal value of 70 billion euros ($94.60 billion) and to pay private bondholders an additional 30 billion euros in cash.

Parliamentary debate on the budget plan is set to begin at committee level next week and it will then be approved in a plenary session by December 8-9. ($1 = 0.740 Euros)

(Reporting by Harry Papachristou)

Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20111118/ts_nm/us_greece

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