New Greek bailout talks to take two weeks—EU Commission

BRUSSELS—The shape of a second bailout for Greece will be discussed in the next two weeks, a European Commission spokesman said Monday, playing down expectations of a decision at weekend eurozone talks.

Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rhen, said consultations are ongoing with the banking sectors over the possible options for their participation in the new Greek debt rescue plan.

“The contours are still being discussed and will continue to be discussed in the coming two weeks,” Altafaj told a news briefing.

Eurozone finance ministers hold a special meeting on Sunday, shortly after the Greek parliament votes on an austerity plan that the EU and the IMF say is a pre-condition for Athens to get the next installment of its first bailout.

Altafaj said Sunday’s talks will be “very much focused” on the fifth tranche, totalling 12 billion euros, which has been held back until Greece approves the latest round of measures.

Greece has struggled to tame its debt crisis despite a 110-billion-euro bailout granted by the European Union and International Monetary Fund last year.

Greek Prime Minister George Papandreou has requested a second financial lifeline and said after an EU summit in Brussels on Friday that it could be similar to last year’s package.

German Finance Minister Wolfgang Schaeuble said at the weekend that he expected to see from the eurozone meeting on Sunday “precise figures as to how much the private sector in Europe” will voluntarily contribute to the new plan.

The EU wants private creditors – banks, pension funds and insurers – to contribute to a rescue in an informal and voluntary rollover of Greek government bonds whereby investors buy new bonds to replace ones that mature.

It fears that if the participation is not seen as voluntary, rating agencies could declare Athens to be in default, potentially setting off a new financial crisis.