Nov. 20 - Euro zone finance ministers are aiming to approve the next tranche of loans to Greece, although the money is unlikely to be disbursed before December and a deal on debt reduction may need further talks. Ciara Sutton reports
Thousands of public sector workers take to the streets of Athens over redundancies. Government spending cuts have devastated the Greek economy as it strives to meet conditions imposed by international lenders. Further injections of cash were suspended in June as the spiralling recession threw reforms off course. But Greece has finally fulfilled its side of the bargain and now its the turn of euro zone finance ministers. They're expected to approve up to 44 billion euro of loans. But Rabobank's Jan Lambregts doesn't think the Brussels meeting will bring much cheer. (SOUNDBITE) (English) RABOBANK'S JAN LAMBREGTS, SAYING: "It will definitely not leave Greece with a sustainable debt outlook, Greece's debt is set to hit between 160-170 percent in the near term. That's far too high. They're never going to reach that 120 percent in 2020 - if 120 percent was even an achievable figure to begin with ever." And there are still many obstacles. The IMF and the euro zone can't agree on Greece's debt reduction targets - a two year extension to 2022 has been dismissed by the Fund. And Germany and the ECB oppose writing off some of the debts - something the IMF favours. Options left include halving the interest on existing bilateral loans Lengthening maturities and lowering fees on those loans and a debt buy-back. Germany believes Greece should buy half the 60 billion euro of bonds privately held at just a quarter of their value. IG's Brenda Kelly says a clash amongst lenders could spell trouble. (SOUNDBITE) (English) MARKET ANALYST AT IG, BRENDA KELLY, SAYING: "I think when you have a bit of a spat between the members of the troika that does cause problems. But what it does do is set a precedent for other countries, so for example those who are looking for a deal on their bank debt, for example Ireland. This could set the scene for them and enable them to make some sort of deal." The euro zone's proposals will be sent to national parliaments for approval at the end of the month. And Greece should get an early Christmas present at the beginning of December.