EU and International Monetary Fund experts have begun ten days of talks on details of rescue loans that Greece may request to avert default with its borrowing costs, which are close to 8%.
Together with the European Central Bank, they opened talks with George Papaconstantinou, Greek Finance Minister, on probable 'financial assistance'.
Amid strong signs that Greece is getting ready to appeal for help, the finance ministry said, 'The discussions concern a three-year programme of economic policies.'
This 'can be supported with financial assistance from euro zone members and the International Monetary Fund should Greek authorities decide to request the activation of the mechanism,' the ministry said.
This was in reference to a rescue package agreed within the EU and euro zone, and involving the IMF, but which still leaves many aspects uncertain.
Among these are the precise terms, conditions and interest rates that would apply if and when Greece asks for help to avert partial default on debt falling due by the end of May.
Greece needs about €10bn within the next few weeks and about €30bn in total for the rest of the year to pay current bills including some pensions and help it enact massive budget cutbacks and structural reforms imposed by the EU.
The Ta Nea newspaper has noted that 'the final countdown' to Greece appealing for EU-IMF loans has begun.
Citing sources in Brussels, the daily paper said that the Greek government was unlikely to call for assistance before crucial regional elections in Germany on 9 May but that the appeal would probably be made on 15 May.
An issue of ten-year Greek bonds totalling €8.5bn expires on 19 May, and must be redeemed if the government is to avoid a hugely damaging partial default.
The government has said it will not hesitate to call on the EU-IMF backup loan under the terms of a eurozone deal to extend Greece up to €45bn at preferential interest rates, should this prove necessary.
At UniCredit Bank in Italy, analysts said that 'activation of the aid plan is the easiest and most sensible way out of the crisis.'
They said the debt redemption date was only four weeks away and that 'action needs to be taken quickly,' estimating that '€45bn should be enough to cover redemptions, coupon (bond interest) payments and the deficit until next year.'
Mr Papaconstantinou told a news conference yesterday that 'there is no chance that Greece will be left hanging in May.'
A solution would be found 'either by borrowing on the market, or from our peers,' he said, referring to the stand-by rescue package.
Greece has been forced to pay record interest rates on international bond markets amid enduring doubts from investors that its strategy to get its spiralling debt under control will work.
Yesterday, Athens sold €1.95bn worth of three-month treasury bills but at more than double the cost of its last comparable issue as buyers exacted a high price for their money.
The treasury bill auction, the third in a week, comes after the interest rate on Greek ten-year government bonds rose to a record 7.807% yesterday.
In a bid to cut debt, the government has slashed spending and raised taxes in measures worth around €16bn this year, angering labour unions which have staged general strikes and a series of work stoppages.
A union representing communist workers has begun a 48-hour strike. State-employed doctors are involved in a similar strike.
The entire public sector will shut down tomorrow as civil servants hold a 24-hour strike, while the union representing the private sector has also indicated plans for industrial action.
