Europe to deliver urgent bailout funds to Greece

The eurozone is on the verge of releasing urgent bailout funds for Greece on Saturday after the parliament adopted tough austerity action, buying the euro time in a debt crisis that is far from over. Moving faster to save Greece from imminent default, eurozone governments agreed in principle on Friday to unlock the funds and changed a special meeting in Brussels from Sunday to a teleconference on Saturday, diplomats said. The weekend talks are now set to release the fifth 12-billion-euro slice of last year's 110-billion-euro ($159.6-billion) bailout for Greece by the European Union and the International Monetary Fund, diplomats said. Greece urgently needs the cash this month to stave off bankruptcy. The ministers, however, are not expected to complete talks on a second bailout of similar size that Greece has requested to stay afloat in the long run, a diplomat said. The meeting was switched in order to "keep it short, non-theatrical, operational for the markets," one diplomat said. Despite days of rioting in the streets of Athens, the Greek parliament on Wednesday and Thursday passed into legislation demands from foreign lenders for steep budget cuts and tax hikes as well as a firesale of state assets. "In very difficult circumstances, it was another act of national responsibility," said EU president Herman Van Rompuy said on Thursday. One year after Greece became the first eurozone nation to receive a bailout, governments are working on a second rescue package to prevent the Greek debt debacle from spreading across borders. Negotiations for the new bailout are proving tricky because governments want private investors to participate this time by agreeing to a voluntary rollover of Greek debt, whereby they would buy new bonds to replace ones that are maturing soon. Another diplomat said there was "not possibility to conclude" those talks this weekend. A decision would have to wait for the next meeting of eurozone finance ministers in Brussels on July 11. France is proposing two options to banks: they could rollover 70 percent of their loans to Greece into new 30-year bonds, or 90 percent of them into five-year bonds. German banks made their own gesture on Thursday by agreeing to extend the maturities of around 3.2 billion euros ($4.6 billion) in Greek bonds due to expire between now and 2014. Josef Ackermann, chief executive of Deutsche Bank, said that negotiations were "extremely complex." The crisis has already claimed two other victims -- Ireland and Portugal -- other nations across the eurozone are scrambling to slash their public deficits and debts to avoid being sucked into the crisis. "The sovereign debt crisis is far from over since there are many potential triggers for further turbulence," Germany's Commerzbank said a note to clients. The weaker eurozone nations are "groaning under the weight" of austerity measures and the collapse of a property bubble, it said. While a slow recovery is likely to continue in Italy, Spain and Ireland, the prospects are "remain very gloomy" for Portugal and Greece. Ben May, European economist at Capital Economics, said Greece has avoided a "near-term disaster" by passing the budget cuts by the country "remains in precarious position."