Eurozone finance ministers are expected to approve a second rescue package for Greece at a meeting tomorrow, a move officials hope will draw a line under four months of social unrest and financial market turmoil that has shaken Athens.
While diplomats and economists do not expect the package to resolve Greece's economic problems, they hope agreement on Monday will help restructure the country's vast debts, put it on a more stable financial footing and keep it inside the single currency zone.
Senior officials from euro zone finance ministries and the European Central Bank held a conference call today to go over the final details of the €130bn programme, including a debt sustainability analysis critical to the IMF.
While there is still scepticism in some countries that Greece will be able to live up to its commitments - including implementing €3.3bn of spending cuts and tax increases - officials said momentum was behind approving the deal and that that line was likely to prevail tomorrow.
"At the moment it appears it will go exactly this way," Austria's finance minister, Maria Fekter, said earlier today when asked in a TV interview if the package would be approved.
"I don't think there is a majority to go a different way because a different way is enormously arduous and costs lots and lots of money."
A eurozone official in contact with junior ministers involved in the conference call said that while there were still gaps to be filled in some of the numbers, they were not so large that they risked derailing the agreement.
"I don't see anybody wanting to be responsible for pulling the plug on the deal at this late stage," he said.
"The gut feeling is that this is going to go through - everyone feels the pressure this time to deliver," he said, indicating that the Netherlands, Finland and Germany, who have been the most critical of Athens' ability to commit, looked likely to come on board if the financing gaps could be closed.
Obligations written off
Under the deal, Greece will have around €100 bn of its obligations written off via a debt restructuring involving private-sector holders of Greek government bonds.
The private sector - mostly banks and insurance companies - will swap bonds they hold for longer-dated Greek securities that pay a lower coupon, resulting in a real 70%- reduction in the value of the assets.
The bond exchange is expected to launch on 8 March and complete three days later, Greece said on Saturday.
That means a €14.5 bn bond repayment due on 20 March would be restructured, allowing Greece to avoid default.
The vast majority of the funds in the €130bn programme will be used to finance the bond swap and to ensure that Greece's banking system remains stable.
