* Conservative leader Samaras signs austerity commitment
* Venizelos says Greeks have found 325 mln euros extra cuts
* Hopes for bailout deal to be clinched on Monday
* EU studies delay of parts of bailout - EU sources
By Dina Kyriakidou and Lefteris Papadimas
ATHENS, Feb 15 Greek party leaders have
met the final two demands set by the country's international
lenders to seal a bailout, paving the way for a deal and an
agreement to ease its debt burden to be announced on Monday,
Finance Minister Evangelos Venizelos said.
Venizelos told reporters late on Wednesday that the cabinet
had decided how to plug a 325 million euro gap in the 3.3
billion euros of extra budget savings this year which the EU and
IMF are demanding in return for the 130 billion euro rescue.
Likewise he noted that the leaders of both parties in the
government of Prime Minister Lucas Papademos had given written
undertakings to implement the austerity measures, which provoked
serious rioting on the streets of Athens last Sunday.
Exasperated euro zone finance ministers in the Eurogroup had
demanded both issues be settled before making a final decision
on the bailout, Greece's second since 2010.
With mistrust of Athens high, EU sources told Reuters euro
zone officials had considered whether it was possible to delay
part or all of the rescue deal while still avoiding a disorderly
Greece needs the funds to avoid bankruptcy when 14.5 billion
euros of debt repayments fall due on March 20.
"The big issue of the 325 million euros has been finalised
and this helped the discussion," Venizelos said following a
lengthy telephone conference call with his euro zone peers.
The Eurogroup had been due to meet in Brussels but its
Chairman Jean-Claude Juncker scaled this down to a
teleconference, complaining that Greek political leaders had
failed to provide written commitments or plug the savings gap.
Greek party leaders have a reputation for working right up
to deadlines, or beyond them, raising tensions with the
Eurogroup which fears that they will avoid implementing the
austerity package in full after elections expected in April.
However, conservative leader Antonis Samaras, the front
runner to become the next prime minister, provided his written
undertaking to the EU and IMF on Wednesday shortly before the
Eurogroup conference call. Socialist leader George Papandreou
wrote a similar letter.
Venizelos said he hoped euro zone officials could tie up all
the issues before the ministerial Eurogroup meets on Monday,
opening the way for a bond swap deal with Greece's private
creditors, known as PSI, which will reduce its debt mountain.
"These issues will be prepared at a Euro Working Group
meeting on Sunday in Brussels so that, with good faith, the
final decision for the approval of the (bailout) programme is
taken and the public announcement of the PSI is made on Monday,"
Greece had said it must initiate a debt swap deal with
private sector bondholders by Friday to meet a March 20 deadline
for the 14.5 billion euros in debt repayments. It was hoping to
have the euro zone's backing for its second bailout this week.
If that backing now comes on Monday, it is possible the debt
swap could start in the middle of next week.
After the three-hour conference call among the 17 euro zone
ministers, Eurogroup chairman Jean-Claude Juncker issued a
statement saying progress had been made, but provided few
He said the European Central Bank, IMF and European
Commission had completed a report into Greece's debt
sustainability - a precondition for approving the bailout - and
that he expected the Eurogroup to be able to take the necessary
decisions on Athens at the next meeting on Monday.
"Further considerations are necessary regarding the specific
mechanisms to strengthen the surveillance of programme
implementation and to ensure that priority is given to debt
servicing," he said.
"On the basis of the elements that are currently on the
table and the above-mentioned additional input, I am confident
that the Eurogroup will be able to take all the necessary
decisions on Monday 20 February."
Samaras, whose New Democracy party is ahead in the polls,
delivered his letter of undertaking earlier on Wednesday.
"If New Democracy wins the next election in Greece, we will
remain committed to the programme's objectives, targets and key
policies," Samaras wrote.
But he insisted the fast-shrinking Greek economy must also
be kickstarted into life and reserved the right to adapt details
of the package accordingly - a hedge that could prove a sticking
point for increasingly frustrated euro zone partners.
"Prioritising recovery along with the other objectives will
only make the programme more effective and the adjustment effort
more successful. Therefore ... policy modifications might be
required to guarantee the full programme's implementation," he
EU sources said some in the euro zone doubted the commitment
of Greece's leaders to austerity, and queried whether it would
be enough to bring Greece's debt-to-GDP ratio down from 160
percent now to a target of 120 percent by 2020.
"There are proposals to delay the Greek package or to split
it, so that an immediate default is avoided, but not everything
is committed to," one official briefed on preparations for the
euro zone finance ministers' call told Reuters.
"There is pressure from several countries to hold off until
there is a concrete commitment from Greece, which may not come
until after they've held elections."
Samaras' belated commitment to honour the austerity plan may
have put that plan on the back burner, even if concerns linger.
"With every small piece of news that we get from Athens, the
situation is becoming better," said an EU diplomat. Whether it
will hold all the way through, we can't know."
After a series of broken promises since Athens was first
bailed out in May 2010, trust is in short supply.
"When you look at the internal political discussions in
Greece and the opinion polls, then you have to ask who will
really guarantee after the elections ... that Greece will stand
by what we are now agreeing with Greece," German Finance
Minister Wolfgang Schaeuble told SWR2 radio.
Greece's President Karolos Papoulias, who holds a largely
ceremonial role, fought back, saying in a speech: "Who is Mr
Schaeuble to insult Greece? Who are the Dutch? Who are the
European Central Bank board member Joerg Asmussen said
approval by the Eurogroup at regular talks next Monday would
allow a sovereign debt swap to be completed in time.
"If the Eurogroup (of euro zone finance ministers) is able
to make a positive political decision next Monday, the bond swap
with voluntary PSI (private sector involvement) can immediately
begin and be completed in time," he told Reuters.
Greece is well on its way to suffering one of the biggest
slumps of modern history. Output has contracted 16 percent from
its peak in 2008 and the cuts will inevitably make that worse.
Papademos has said that failure to back the bailout would
consign Greece to economic catastrophe.
But with many Greeks suffering huge cuts in their living
standards and young people burning and wrecking almost 100
Athens buildings in one night on Sunday, some people believe the
catastrophe is already under way.