Second Greek bailout in reach, funding gap narrows

February 21, 2012 04:31

BRUSSELS - Euro zone finance ministers, locked in marathon overnight talks, inched towards approving a second bailout for debt-laden Greece that would resolve Athens' immediate repayment needs but seems unlikely to revive the nation's shattered economy.

Agreement on a 130-billion-euro rescue package with strict conditions would draw a line under months of uncertainty that has shaken the currency bloc, and avert an imminent bankruptcy.

After 11 hours of talks, ministers had found ways to cut Greece's debt to between 123 and 124 percent of gross domestic product by 2020, but were pressing for more. Negotiators for private bondholders had offered to accept a bigger loss to help plug the funding gap, senior officials said.

A report prepared for ministers by EU, European Central Bank and IMF experts, obtained exclusively by Reuters, said Greece would need extra relief to cut its debts to the official target of 120 percent of GDP by 2020 given the ever-worsening state of its economy.

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