Greek unions have called a two-day general strike for next week to coincide with the debate in parliament on a new round of austerity measures.
Greece concluded talks with EU and IMF inspectors on its five-year austerity plan and will put the legislation to parliament next week, its government spokesman said this evening.
‘I have just talked to the minister of finance, who reported that discussions between the government and the troika have been completed and we are moving to the adoption by parliament next week of the mid-term targets and the first implementation law,’ spokesman Elias Mossialos told Reuters at an EU summit in Brussels.
Earlier, a source familiar with the talks in Athens said a deal had been reached to close a €3.8bn funding gap in the Greek programme.
The 27 leaders of the countries in the EU gathered in Brussels this evening.
Afterwards, they issued a statement welcoming Ireland's progress in implementing the EU-IMF bailout programme, but saying Greece had to adopt an austerity and privatisation programme as a matter of urgency in order to avail of a second bail out programme.
Greece needs a further €120bn in order to avoid going bankrupt over the next two years.
Greek prime minister George Papandreou lodged a formal request for a new bailout with the EU and the IMF, the EU leaders’ statement said.
‘Following the request by the Greek government announced by the Greek prime minister,’ the bloc ordered finance ministers ‘to complete work on outstanding elements to allow the necessary decisions to be taken by early July,’ leaders said of the call for a second financial rescue.
Mr Papandreou said on leaving the summit for the night: ‘We've got the support of our partners and I think this is not only a green light but also a positive sign for the future of Greece.’
The leaders’ focus was expected to be on how private creditors were responding to requests for a voluntary involvement in the next bail-out for Greece.
However, there is also now concern about whether the Greek parliament adopts the reforms next week.
Those concerns stem from a phone call between the Slovak Prime Minister and Mr Papandreou in which he reportedly voiced doubts that the reforms would have the necessary support from MPs.
Such a vote would trigger an immediate crisis and raise the real possibility of a Greek default.
Mr Papandreou was due to meet fellow Socialist leaders this morning but did not make it due to a delay.
Minister for Finance Michael Noonan said this week in Luxembourg that Ireland's priority is to ensure that any plans for Greece do not have detrimental impacts on Ireland.
However, the warning from the ESRB shows this crisis has the capacity at least to overwhelm the global financial system.
Elsewhere, US Federal Reserve chief Ben Bernanke warned the Greek debt crisis could threaten the stability of the global financial system if a solution is not found.
Mr Bernanke said the US central bank was following the situation closely.
'If there were a failure to resolve that situation, it would pose threats to the European financial systems, the global financial system and to European political unity,' he said.
Mr Bernanke stressed that the Fed is not part of the negotiations to resolve the crisis, but has been 'kept well-informed', citing a conference call over the weekend with the G7 countries on the issue.
'We are mostly just following the situation closely and making sure as best we can that our own institutions are well-positioned relative to sovereign debt in the so-called peripheral countries.'