Greece to complete bailout talks by Thursday: paper

By @ibtimes on

Greece and a team of EU/IMF/ECB inspectors are set to conclude talks by Thursday on a medium-term fiscal plan including the government's progress toward meeting budget targets, a Greek newspaper reported on Wednesday.

Inspectors from the troika are in Athens to decide whether to release a tranche of 12 billion euros the country needs next month to avoid a default. In part due to IMF demands, discussions on a new package that would meet Greece's needs up to 2014 are also taking place.

The new package, expected to total around 65 billion euros according to EU officials, could involve a mixture of collateralized loans from the EU and IMF, and additional revenue measures, with unprecedented intrusive external supervision of Greece's privatization program.

Government sources say talks with the 'troika' representatives will be completed by tomorrow morning at the latest, so that the 2011 measures and the mid-term fiscal plan come before a cabinet meeting for approval on Friday, daily Kathimerini said.

The German government has said that it expected the talks to be completed by the end of this week, or possibly early next week.

Germany's Frankfurter Allgemeine Zeitung newspaper reported that the IMF would not pay its share of the bailout tranche at end-June, but would take part in a new program for Greece.

A Greek finance ministry spokeswoman declined to comment.

The IMF said last week it would not release the next slice of aid to keep Greece afloat unless the EU guaranteed Athens' entire funding needs for the next 12 months.

That is problematic since under the current plan Greece would resume raising some money from the markets in March 2012 -- an assumption that is now unrealistic given sky-high Greek bond yields in secondary market trade.

European officials are holding talks in Vienna to sketch out options for a second bailout package, with private sector participation still under discussion to help relieve the country of its massive debt burden.

Deputy Prime Minister Theodoros Pangalos will also chair an interministerial meeting on Wednesday on moves to downsize the public sector and terminate some government bodies as Athens scrambles to cut its wage bill further.

A press conference will follow.

The government is considering shrinking, merging and terminating a number of agencies that have no substantive mission, keen to show its lenders it is determined to shrink the public sector.

(Reporting by George Georgiopoulos; editing by David Stamp and Patrick Graham)

Join the Discussion