Greece's Prime Minister George Papandreou will hold emergency talks with a top eurozone official on Friday as an international review of the country's finances is expected to usher in more drastic cuts needed in exchange for new rescue loans.
The meeting was announced Wednesday by the office of Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of 17 eurozone finance ministers and recently criticized Greece for being slow in cutting debt and reforming the public sector.
Greece's Socialist government is concluding negotiations with the European Union and the International Monetary Fund to receive a vital fifth installment of its bailout loans later this month, worth euro12 billion ($17.3 billion).
The negotiations' outcome will depend on a review of the country's finances by the EU and IMF due to be published by the end of this week. The talks are considered key to providing possible additional bailout assistance next year, as Greece remains frozen out of the bond markets by high interest rates.
Government spokesman Giorgos Petalotis said Greece is "confident" it will receive the next bailout loan tranche, which is widely expected to come on condition of more pension and pay cuts and consumer tax hikes.
EU officials said there was "good progress" in the talks, but also suggested more austerity measures would be likely.
"Once the review is concluded positively, the EU with the IMF will move on to prepare next steps in order to safeguard financial stability and to continue economic reform in Greece," said Olli Rehn, the EU Commissioner for monetary affairs, at an event in New York.
The governor of Greece's central bank, George Provopoulos, on Wednesday described speculation of a possible Greek exit from the eurozone as "unbelievable and absurd" as the country awaited the results of the international review.
Greeks were already seeing the effects of the intensified austerity measures. Some 7,000 civil service jobs will be placed under review after the government announced Wednesday that 75 state agencies will be closed or restructured over the summer -- the first tangible indication of possible government layoffs since the Greek debt crisis began.
The impending cuts have triggered fresh protests.
On Wednesday, scores of unemployed protesters blocked the entrance to the Finance Ministry, while the EU and IMF debt monitors were inside the building. The protesters moved backed after briefly scuffling with riot police.
Demonstrators joining a new Internet-organized protest movement were set to gather for an eighth straight day in Greek cities, while the country's two largest labor unions announced plans to stage a central Athens protest march on Saturday.
Riot police were called in to escort lawmakers out of parliament late Tuesday, after some 200 demonstrators heckled deputies as they left in their cars, some spitting at and kicking the vehicles.
Gabriele Steinhauser contributed to this report from Brussels.
AP
