Greek debt crisis

Luxembourg's prime minister and head of the Eurogroup, Jean-Claude Juncker, has called a meeting of eurozone finance ministers for Sunday afternoon.

They will be joined by representatives from the European Central Bank (ECB) and the European Commission in the hope that the details of a multi-billion euro rescue deal can be worked out.

The aim of the meeting is to approve three years' worth of loans from the EU and the IMF for Greece, ahead of a crucial deadline for the Greek government on May 19. That is the day Greece is expected to issue a nine billion euro (12 billion dollar) bond to refinance its debt.

Last Friday, Greece asked for the IMF-EU rescue package to be activated, a move that followed by intense negotiations to work out the amount and the conditions of the deal.

Although initially set at a total of 45 billion euros over three years, that amount could shoot up to 135 billion euros, according to analysts and German lawmakers.

German response

Helping Greece avoid default is deeply unpopular among Germans, not least because it is expected that Germany will pay more towards the aid deal than any other EU member state.

With an election looming in Germany's largest state, North Rhine-Westphalia, Chancellor Angela Merkel's government has been reluctant to agree to a deal too willingly, as taxpayers will have to foot the bill.

But Merkel told a news briefing on Friday that she expected the EU-IMF talks to achieve results on the weekend, with the German cabinet set to approve the measures agreed to on Monday.

German Economics Minister Rainer Bruederle said on Friday that the German parliament could then give its approval as early as May 7.

Bruederle also welcomed German banks' willingness to contribute to the rescue package, something that German lawmakers from various parties had set as a condition for their approval in parliament.

"A voluntary contribution is always better than a forced one," Bruederle said during a visit to Portugal. "Every euro we can get is a bonus."

Unpopular measures

With a budget deficit of nearly 14 percent of national income, Greece is trying to avoid defaulting on its debt by imposing strict austerity measures. That decision has led to a wave of strikes across the country, with more scheduled for next Wednesday.

But Greek Prime Minister George Papandreou insisted Friday the cuts "are necessary for our country's protection, for our future, for us to be able to stand on our feet."

Papandreou's government aims to achieve 24 billion euros of spending cuts, which would lower the deficit by a hefty 10 percent.

ng/dpa/Reuters/AFP
Editor: Susan Houlton