PARIS (MNI) – Eurogroup finance ministers are moving toward
approval of the entire E130 billion Greek bailout package and bond swap
on Monday, as a number of major divisive issues have been taken off the
table, Eurozone sources said.

The Eurogroup Working Group will meet on Sunday to tackle issues
including ways to monitor the implementation of economic reforms by
Athens and the creation of an escrow account for debt payments.

On Monday, finance ministers may also discuss charging lower
interest rates to Greece as a way of bringing its debt down to 120% of
GDP by 2020 from a current estimate of around 128% in the debt
sustainability analysis presented to ministers this week.

“The overall package could be approved pretty quickly,” one EU
source told Market News International.

The source said proposals to delay approval of the bailout until
after Greek elections or approving only enough of it to launch the bond
swap were “no longer on the table.” Another proposal that would have
required even the smaller Greek political parties to give written
support to the bailout program has also been rejected.

Other factors favoring a deal have also fallen into place in recent
days, as Greece and international lenders have agreed on measures to
fill a E325 million budget gap. The European Central Bank, according to
reports, has embarked on a swap plan for its Greek bonds that will avoid
it having to take any losses.

The deal could still face a last-minute setback, sources cautioned,
because Germany and other northern Eurozone states remain deeply
suspicious of Greece’s willingness to implement the bailout program.

The German Finance Ministry said Friday that some details remained
to be clarified on the Greek package and that it was too early to
predict approval. But the government also said that a disorderly Greek
default was not in Germany’s interest and that Finance Minister Wolfgang
Schaeuble and Chancellor Angela Merkel have the same position on the
issue.

–Paris newsroom, +33142715540; jduffy@marketnews.com

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