20 Sep 2011

Greece 'close to agreement' on bailout money

9:38 am on 20 September 2011

Greece is reported to be close to an agreement with its international lenders to continue receiving bailout funds.

Greek minister Evangelos Venizelos held a conference call with officials of the IMF, European Union and European Central Bank about whether the country is doing enough to receive crucial funds.

The country's finance ministry has described the talks as satisfying, saying a productive and substantive discussion took place.

An official in the ministry speaking on condition of anonymity says an agreement is close, but some work still needs to be done.

Before the talks, the IMF representative in Greece spelled out steps Athens must take to secure the next tranche of funds, an 8 billion euro payment.

Bob Traa said Greece must shrink its public sector and improve tax collection rather than adding further taxes.

Without its next payment, Athens says it will run out of cash in mid-October, leaving it unable to cover state salaries and pensions and pay its bills.

A default would pose the risk of contagion to larger euro zone economies, such as Italy, and badly affect European banks with heavy exposure to Greece.