Greece in talks to finalise bailout

GREECE and its creditors were last night trying to finalise a new multi-billlion euro bailout deal needed to meet a crucial repayment to the European Central Bank this month.

The Athens government wants to seal a deal for €86bn or nearly £61bn by today ahead of the August 20 due date for repayment to the ECB.

The recently re-opened Athens stock market – where trading had been suspended for several weeks until last week – advanced slightly on hopes of a deal but shares are still down heavily since the start of the year.

The Greek banking sector, which was shut down for three weeks earlier in the summer, is in urgent need of a capital injection to stay afloat.

The country’s economy looks set to plunge back into recession this year with industrial production figures for June down 4.5pc on a year ago.

The rescue package would be the third for the troubled country.

The International Monetary Fund has said it will not participate in any new lifeboat unless there is a firm agreement on debt relief.

Germany, for its part, which has played the biggest part in supporting Greece, is adamant the IMF must be involved.

Leading German politician Ralph Brinkhaus suggested a new aid programme could be split into smaller payments to give creditors more leverage if reform measures did not happen.