Euro officials scrambling to save Greece from financial disaster

Speculation is rising that the cash-strapped Greek government is nearing an agreement with officials from the European Union, International Monetary Fund and European Central Bank on then next round of bailout financing.

According to a Greek newspaper, European officials are monitoring Athens’ progress towards budget targets and will decide upon a medium-term fiscal plan for the financially ailing country.

The next scheduled tranche of bailout money – 12-billion euros – is scheduled to be paid out next month. Greece desperately needs that cash to avoid a disastrous default, however there are fears that either the EU/IMF will withhold such funds because Athens is failing to meet minimum standards of fiscal responsibility; or that they will demands that the Greek government impose even more draconian measures to reduce debt.

As such, according to reports, Greece may receive an entirely new round of funds which may comprise a mix of collateralized loans in exchange for unprecedented level of intrusive external supervision on Greece's internal privatization program.

The Greek daily newspaper Kathimerini wrote: Government sources say talks with the [EU/IMF/ECB] representatives will be completed by tomorrow morning at the latest, so that the 2011 measures and the mid-term fiscal plan come before a cabinet meeting for approval on Friday.

However, Germany's Frankfurter Allgemeine Zeitung newspaper reported that the IMF will not pay its share of the next bailout tranche at the end of June, but will participate in a new funding program for Greece.

Last week, the IMF said it will not approve the next round of financial aid to Greece unless the EU guaranteed Athens' entire funding needs for the next year.

According to other reports, European officials are also meeting in Vienna, Austria to discuss a financial package to rescue Greece – including the possible participation of private entities.

Meanwhile, in Athens itself, the government is under enormous pressure to further cut spending. Deputy Prime Minister Theodoros Pangalos will hold meetings to map out a plan to reduce the public sector and perhaps eliminate various governmental agencies.