Eurozone set to approve Greece cashflow aid

European finance chiefs launched crunch talks on bailout No. 2 for Greece on Sunday in Luxembourg, where they are expected to approve emergency cashflow aid amid fears of a domino effect across the eurozone. As a reshuffled Greek government vowed to deliver on new promises of austerity ahead of a confidence vote in parliament, eurozone partners readied to greenlight part of a fifth, 12-billion-euro tranche of loans under last year's 110-billion-euro ($156 billion) bailout due early in July. The delivery of these monies had been placed in doubt by insufficient progress towards debt reduction in Athens, amid a growing wave of protest in the Greek capital that threatened Prime Minister George Papandreou. Belgium's finance minister Didier Reynders said that "just under six billion euros" needed by the Greek government to meet a repayments bottleneck early next month could initially be found to avert an early default. That would pave the way for the more difficult discussion about how to ensure banks -- many of which were bailed out by governments during recession -- share the burden of a second bailout with taxpayers. European Union leaders are trying to agree the broad outlines of a new 100-billion-euro rescue package for the autumn at a summit in Brussels on Thursday and Friday. The idea is to shield Greece from the vagaries of commercial money markets -- already charging sky-high rates -- until the end of 2014. In doing so, they hope to protect the likes of Belgium or Italy, the eurozone's third-largest economy, from being sucked into a whirlpool of prohibitive interest rates. Luxembourg Prime Minister Jean-Claude Juncker, who chaired Sunday evening's initial Eurogroup talks before full European Union discussions on Monday, said he expected no decision on Greece overnight. Greece's euro partners have still to approve loans of more than 8.7 billion euros, the fifth tranche from bailout No. 1 being completed by a further 3.3-billion-euro portion from the IMF. "We must above all find short-term financing," said Reynders. "There are financing capacities at the International Monetary Fund, capacities at the European Union to find the just under six billion euros needed between now and the start of July." A diplomatic source said the idea was to keep Greece afloat while testing market reaction, seeing if bond spreads widen for other stressed eurozone states, around decisions reached at the EU summit in Brussels. Some countries are resisting handing over more money until Greece demonstrates it can get new belt-tightening, tax rises and a state asset sell-off through its parliament. Dutch Finance Minister Jan Kees De Jager said the fifth tranche "depends on Greece's implementation of all the austerity measures, and the IMF's assessment of that." Barely 48 hours after being handed the tough Greek portfolio, Evangelos Venizelos insisted: "We can achieve our target." "It is a great opportunity for me to repeat the strong commitment of the Greek government and the strong will of the Greek people for the implementation of the programme," Venizelos said, referring to a new four-year austerity package crucial to securing fresh aid. The real work concerns how best to persuade private investors that they will not be left behind governments in the queue for repayments if things still go belly-up four, five, six or seven years further down the line. "The heart of the matter is not happening here but in Athens," said Germany's Finance Minister Wolfgang Schauble. The Greek government is battling to push through a controversial budget plan, including 28.4 billion euros ($40.6 billion) of fiscal belt-tightening, which has triggered civil unrest. It must be adopted by the end of the month to convince creditor nations, the EU and the IMF to continue dishing out financial aid to the country. In Athens, Papandreou on Sunday urged political parties to forge a "national accord" and back him in a confidence vote "because the country finds itself at a crucial point."