By Peter Spiegel in Brussels, Gerrit Wiesmann in Berlin and Matt Steinglass in Amsterdam, Financial Times
The agreement, which officials hope to finalise on Monday, is likely to include an escrow account that must always contain enough cash to pay Greece’s debt for nine to 12 months. If the account falls below that level, funding will be taken from aid earmarked to run the Greek government, according to people briefed on the talks. In addition, the bail-out will include a permanent and beefed-up presence of international monitors who will attempt to keep real-time tabs on the Greek government’s spending decisions, officials said.
The deal will be quickly followed by a €200bn Greek debt restructuring, with offers to private debt holders to participate to be issued on Wednesday. The offer would be open for 10 days, officials said, and the swap formally completed a week before a €14.5bn bond becomes due on March 20, narrowly avoiding a default.
But senior officials warned that a deal was not assured. According to one official, under the plan Greece’s debt would be more than 128 per cent of economic output by 2020. That is well above the 120 per cent the International Monetary Fund and several northern European Union countries have demanded.
And divisions remain in Berlin over whether to proceed with the programme or let Greece default.
Angela Merkel, chancellor, has remained steadfast in avoiding a default. But two senior officials said Wolfgang Schäuble, finance minister, has become more adamant in opposing sending more aid to Greece.
Officials in Finland and the Netherlands expressed similar views.
Eurozone leaders are still debating ways to keep pressure on Athens. Officials have begun to push Greece into a “grand coalition” with the country’s two main parties – the centre-left Pasok and centre-right New Democracy – sharing power.
