European finance officials will meet in Vienna on Wednesday to thrash out Greece's debt problems, with a second bailout in exchange for new belt-tightening and sell-offs appearing more likely.
As an EU-IMF mission in Athens nears its conclusion, European diplomatic and governmental sources told AFP the meeting of junior finance ministers and national treasury officials is a regular gathering that prepares finance ministerial talks, the next due on June 20 in Brussels.
However, representatives of the 17 eurozone states will peel off to consider the implications for their finances of a second bailout request from Athens.
The ministers' agenda will cover a hole in Athens' finances estimated at some 60-70 billion euros and possible new aid on the basis of a draft report by experts from the European Commission, International Monetary Fund and European Central Bank, due by the end of the week.
The report, which will identify where Greece stands in its efforts to straighten out its public finances, might be delayed until Monday, one of the European sources added.
"Good progress is being made, our feeling is we're very very close," Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rehn, told a news briefing on Tuesday.
An announcement is expected in the "coming days", although that will only concern whether the troika recommends handing over the next planned installments of last year's bailout -- 8.7 billion of loans from eurozone partners and 3.3 billion euros from the IMF.
Greece is expected to propose considerable new efforts in exchange for new money in one form or another from eurozone partners, the IMF and the ECB.
Greek officials are currently locked in negotiations with representatives from the three organisations which last year bailed out the country with a 110-billion-euro ($157-billion) loan.
Athens needs a scheduled instalment of the loan, worth 12 billion euros, to pay its bills in July.
But the IMF has threatened to withhold its share of the funding without a broader agreement that will make Greece's debt -- over 350 billion euros -- sustainable.
The top-selling Greek daily Ta Nea said on Tuesday, citing sources in Brussels, that the country will receive the new loan in return for additional spending cuts and a faster rate of privatisations.
Meanwhile the Wall Street Journal reported that Germany is considering dropping its push for a rescheduling of Greek debt in order to facilitate a new loan package.
The euro climbed Tuesday on hopes that Greece could receive a new rescue loan, jumping to $1.4409 in late morning trade from $1.4282 late on Monday.
Italy's central bank chief Mario Draghi, who is set to head up the ECB, warned that the debt crisis in Greece, Ireland and Portugal could have "significant systemic effects" in the eurozone.
"European economic and monetary union is facing its most difficult test since it was created," he said. "There are no shortcuts."
AFP
