Eurozone finance ministers will again convene in Brussels on Monday to discuss Greek debt. They are expected to approve of a second package of emergency loans. The US has lent its support to a deal ahead of the talks.
Greek Prime Minister Lucas Papademos left for Brussels on Sunday, ready for Monday's key talks with finance ministers from the 17 countries that use the European single currency, the euro.
Papademos' office said he would hold private discussions with European officials ahead of the meeting, as well as attend the gathering of finance ministers from the Eurogroup.
The Greek prime minister will hope that his European partners agree on a second package of international loans for the cash-strapped government in Athens. Papademos' government committed to another round of biting cuts last week, apparently overcoming the final impediment to a deal. Greek debt repayments worth 14.5 billion euros ($19 billion) mature on March 20, and the government is thought unable to meet these obligations without a fresh supply of bailout money.
The second set of emergency loans for Greece would be worth 130 billion euros, and would follow on from an earlier bailout worth 110 billion euros. Fellow European countries would finance the loans, along with the International Monetary Fund (IMF). A further deal with private sector lenders writing down some 100 billion euros of Greek debt is also a part of the accord.
Greece is walking a financial tightrope, trying to control a national debt worth over 160 percent of gross domestic product, while also seeking to nurture a declining economy and a rising joblessness rate of over 20 percent.
With fresh parliamentary elections scheduled for April, Greece also needs to convince international partners that it will continue along the path of reform after the short reign of "technocrat" Prime Minister Papademos. Further protests against Greek budget cuts in Athens and Thessaloniki on Sunday reemphasized public opposition to the austerity program.
US announces support
On the eve of the meeting in Brussels, US Treasury Secretary Timothy Geithner threw Washington's support behind a second loans deal for Greece.
"We welcome the program of economic reforms agreed to by the prime minister of Greece and the coalition parties, and the public statement of support from the major economies of Europe," Geithner said in a statement.
Treasury Secretary Geithner said the US would encourage the IMF to rubberstamp the deal
The latest set of Greek cuts included a 22-percent reduction in the minimum wage and a 12-percent reduction in pensions worth more than 1,300 euros per month.
"This is a very strong and very difficult package of reforms, deserving of support of the international community and the IMF. The United States will encourage the IMF to support this agreement," Geithner said.
The IMF, which provided 30 billion euros towards the first Greek rescue agreed upon in May 2010, has been quiet on its position on a second Greek deal. The US is the IMF's largest shareholder, possessing enough votes to block any major decision.
Key European leaders, including European Commission Vice-President Viviane Reding and German Finance Minister Wolfgang Schäuble, have expressed confidence that the Greek loans will be agreed on Monday after months of negotiations. The deal was initially announced at an EU summit last July.
msh/gsw (AFP, Reuters) / dw de
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