BRUSSELS (MNI) – Talks to thrash out the details of an aid plan for
Greece could take two to three weeks, but a lot of work has already been
done, a European Commission spokesperson said on Tuesday.

“What my colleagues tell me is that usually the talks [of this
kind] take between 2-3 weeks,” European Commission spokesman Amadeu
Tardio told reporters in Brussels.

“There is a convergence in the assessments,” he said. “There is
already a lot of work that has been carried out and shared.”

Officials hope a delayed meeting to discuss the details of a E45
billion aid package for Greece can take place in Athens on Wednesday.

Representatives from the European Commission, the European Central
Bank and the International Monetary Fund were due to meet officials from
the Greek government on Monday in Athens to thrash out the details of
the aid offer.

But the talks were postponed until at least Wednesday after a
volcanic eruption in Iceland prompted the imposition of air travel
restrictions across Europe.

“I know that some IMF colleagues are already there [in Athens],”
Tadrio said. “If all goes to plan, tomorrow the talks will begin.”

He said all the authorities were “quite clear” on the need for the
Greek government to implement the austerity measures they have proposed
this year.

“There is a need now to be more specific on adjustment measures for
2011 and 2012,” he said.

Eurozone members have said they will provide up to E30 billion in
bilateral loans for Greece this year in a joint programme with the IMF.
The exact IMF contribution isn’t yet known, Tardio said, but “the IMF
will be providing additional funding for the first year. It’s a joint
programme.” The likely IMF contribution has been estimated at between
E10 billion and E15 billion.

He said the total amount of aid needed by Greece over the three
years of the programme hadn’t been finalised.

“The Eurogroup programme clearly identified a need for a three-year
period,” he said. “It is difficult to forecast needs beyond this year.”

Tardio said Greece could still tap the markets for funding, even if
they’ve activated the aid mechanism.

“The Greek authorities will be keeping an eye on things, even if
they’ve asked for the mechanism,” Tadrio said. “One doesn’t exclude the
other.”

The delay of the aid talks added to uncertainty about Greece’s debt
situation. Greek spreads were trading at 470 basis points above the
German Bund on Tuesday, 42 basis points wider than Monday’s 428 basis
points.

The country is grappling to manage a budget deficit more than four
times the EU’s stipulated 3% limit and has to fund E8.22 billion in bond
redemptions and E1.585 billion in T-bill redemptions on April 23.

European Central Bank Governing Council member Axel Weber said
Greece could require up to E80 billion in aid to avoid default, the Wall
Street Journal reported on Tuesday, citing an unnamed source.

Asked if Weber was wrong with his estimate, Tardio said: “I hope
not, for his sake.”

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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