Eurozone set to deal Greece new bailout hand to keep the country in grouping

BRUSSELS: The eurozone intends today to draw a line under the contentious second Greek bailout with a deal which they hope will also quell suggestions Athens could be pushed out of the currency area.

After several false starts during weeks of what officials said was “deliberate pressure” to get the ruling class in Athens to change its economic mindset, a strong political and financial signal is now anticipated when the Eurogroup of finance ministers meet in Brussels.

This after Greece enacted fresh spending cuts despite violent protests.

Party leaders seeking power in a general election set for April committed separately to carrying through radical reforms, as hardliners floated a willingness to cut the country adrift.

The Italian government – until recently, most at risk of financialmarket contagion given a massive debt burden there – said on Friday that German Chancellor Angela Merkel, Italy’s Prime Minister Mario Monti and Greek counterpart Lucas Papademos were “confident that a deal can be reached on Greece at the Eurogroup,” after telephone talks.

As one negotiator told AFP: “The Greek government might not get everything it wants going forward, but if it tries really hard, it will now get what it needs.”

Perhaps significantly, China’s leader-in-waiting Xi Jinping told the Irish Times, ahead of a visit to Ireland Monday, that he believes the economic problems facing the European Union, Beijing’s biggest trading partner, “are temporary.”

Arguments about how far the eurozone can dictate day-to-day decision-making in sovereign Greece still have a way to run, although former European Central Bank deputy Papademos has already waved the white flag on external surveillance. Work on the figures would keep officials busy right up until the Eurogroup meeting in Brussels, with 11th-hour discussions to iron out details yesterday.

There are still issues to resolve before a deal can be announced that would free the eurozone to park the Greek problem to one side, and return the focus to constructing a financial firewall for the currency as a whole at a March 2 euro summit. –