Euro zone finance ministers will approve the next tranche of emergency aid for Greece on Saturday and discuss a second three-year financing plan for Athens on July 11, euro zone officials said.
The release of the 12 billion euro ($17 billion) tranche from the euro zone and the International Monetary Fund has been made possible after the Greek parliament passed austerity and reform laws on Wednesday and Thursday, removing the threat of a near-term debt default.
The conditions are now in place for a decision on the disbursement of the next tranche of financial assistance for Greece and for rapid progress on a second assistance package, European Commission President Jose Manuel Barroso and European Council President Herman van Rompuy said on Thursday.
But Germany, which funds much of the European Union part of Greece's bailouts, said the laws must be turned into action. Parliament's decisions are one thing and their implementation another, said Foreign Minister Guido Westerwelle.
The latter is what is most important, if we want to strengthen the common European house and Greece particularly, he told Greece's To Vima newspaper in an interview published on Saturday.
Athens has repeatedly failed to meet budget targets laid down in the first bailout agreed last year with the EU and International Monetary Fund, raising the risk that the crisis will spread across the euro zone.
Greece's second financing program is to run from 2011 to 2014 and will come on top of the existing 110 billion euro program.
The ministers are unlikely to give much new detail on the second financing program after their discussions, which were due to be held by telephone at 1600 GMT. Euro zone official sources said Saturday's conference call would focus on releasing the next tranche of aid for Greece, the fifth under last year's bailout.
The ministers will really focus the meeting on the fifth tranche. The fact that they are not meeting in person means that there are no major obstacles to decide on this, said one euro zone official, who asked not to be named.
EU leaders made a commitment to the second program at their last summit on June 23-24, which should satisfy the IMF's condition that the euro zone must promise to finance Greece 12 months ahead for the IMF to contribute.
They also said funding for the program would be from euro zone taxpayers but also from a substantial, voluntary contribution of private investors via a Greek debt rollover.
The additional external financing for Greece in that period, from both private and public money, could be about 80-90 billion euros, officials have said. Greece is expected to raise another 30 billion euros from privatisation in that time.
But there is growing concern among EU officials that the strictures being imposed on Greece, including 28 billion euros of austerity measures between now and 2015, are too harsh.
The finance minister for Poland, which has just taken over the six-month presidency of the European Union, suggested on Saturday that too much emphasis had been put on austerity and too little on growth in Greece.
The market still sees an 81 percent chance that Greece will eventually default, however, and German Finance Minister Wolfgang Schaeuble told Der Spiegel in an interview that Berlin was making preparations for such an event -- even though it does not expect it to happen.
HOW MUCH FROM THE PRIVATE SECTOR
On Saturday the finance ministers from the 17 countries using the euro and the President of the European Central Bank Jean-Claude Trichet are likely to discuss how much of the 80-90 billion euros could come from the private sector.
Private financial institutions held talks with finance ministry and central bank officials in euro zone countries last week to discuss under what conditions the private sector would be willing to help finance Greece and by how much.
The involvement of the private sector in the next package is a must for several euro zone countries as voters grow increasingly opposed to shouldering the burden of bailing out Greece on their own.
But private sector involvement must be voluntary to avoid triggering another downgrade of Greek debt to default status by ratings agencies, a development which could put the whole Greek banking sector at risk.
The Institute of International Finance, a global association of financial institutions, said on Friday that the private financial community is ready to engage in a voluntary, cooperative, transparent and broad-based effort to support Greece given its unique and exceptional circumstances.
Schaeuble has said German banks wanted to roll over 3.2 billion euros' worth of Greek bonds maturing to 2014.
French banks have reached an agreement on how to roll over part of their Greek debt holdings, French President Nicolas Sarkozy said, but did not indicate the total amount.
A further meeting on July 11 will help to finalize the second financing package for Greece, but some officials said they would not be surprised if the final decision were taken by finance ministers only in September.
(Additional reporting by Angeliki Koutantou in Athens, editing by Diana Abdallah)