Greece to draw new EU-IMF loan for reforms

Greece will receive a new loan from Europe and the International Monetary Fund in return for additional spending cuts and a faster rate of privatisations, a newspaper report said Tuesday. Top-selling Ta Nea daily said Athens had concluded a deal with its 'troika' of creditors -- the EU, IMF and the European Central Bank -- that includes "a new loan", according to sources in Brussels. Eleftherotypia daily said the new loan could be up to 60 billion euros ($86 billion) to enable Greece to meet its payments schedule from 2012 onwards. In return, the government will make additional cuts of up to 10 percent to higher-paid civil servants and impose a stricter hiring procedure, only replacing one in ten job openings, said Ta Nea, which is politically close to the ruling Socialist party. A new entity called the Public Property Fund, independent from the state, will also be created to oversee the privatisation drive, both dailies said. Greece is currently locked in negotiations with representatives from the three organisations which last year bailed out the country with a 110-billion-euro ($157-billion) loan. It needs a scheduled instalment of the loan, worth 12 billion euros, to pay its bills in July. But the IMF has threatened to withhold its share of the funding without a broader agreement that will make Greece's debt -- over 350 billion euros -- sustainable. Greek Finance Minister George Papaconstantinou has said the talks are expected to conclude by Wednesday at the latest. Ta Nea said an agreement will be announced on Friday afternoon, after the close of European markets. "The EU-IMF report will note that Greece's debt is not viable and point out delays in the fiscal adjustment and structural reforms programme," it said. An emergency eurozone summit for June 5-6 is also expected to be announced on Friday, the daily said. At least three eurozone states -- Finland, the Netherlands and heavyweight Germany - have expressed reservations towards a new Greek bailout. The privatisation drive, designed to raise some 50 billion euros by selling choice state assets such as the Hellenic Telecommunications Organisation and part of the Public Power Corporation, has met with union opposition. Greek unions are meeting on Wednesday to finalise another general strike, expected to coincide with a European worker mobilisation on June 21.