Greece close to bailout

GREEK officials held talks yesterday with negotiators from European Union and International Monetary Fund to free up urgently needed bailout loans, but the government and lenders were reported to be at odds over how to meet a promise to lay off state workers.

Without a deal to release an ¤8 billion (£6.9bn) tranche of an EU bailout, massively indebted Greece could run out of money within weeks to pay state wage bills. To secure the bailout, the Greek government has promised to impose tax hikes, slash public sector wages by an average of 20 per cent and cut the number of state workers by a fifth by 2015.

Last night, Greek finance minister Evangelos Venizelos said the country would receive the sixth tranche of its EU/IMF bailout loan because it was taking the necessary austerity measures. “Since we are taking such difficult decisions and the Greek people are shouldering such great sacrifices, yes, the sixth tranche is assured,” he said. “Any discussion of a default is either naive or dangerous.”

European officials fear a Greek debt default, which could wreck balance sheets of European banks, could also damage the prospects of the single currency and plunge the world into a new global financial crisis.