Agreement on the bailout, which comes on top of a $145 billion rescue granted in 2010, has been delayed for months due to Greek doubts over political leaders' commitment to tough new austerity measures as well as the worsening economic situation in the country that kicked off Europe's debt crisis two years ago.
The caution of some eurozone governments over handing more money to Athens had investors wondering whether Greece would be forced to default and leave the euro instead. After days of confusion, Germany - the main bankroller for the bailouts - made it clear it wanted to see Greece's deal through.
"The three leaders are optimistic that the finance ministers can find a solution to the pending questions at the Eurogroup on Monday, and thereby contribute to the stabilization of Greece," said spokesman Steffen Seibert after Merkel, Italian Prime Minister Mario Monti and Greece's Premier Lucas Papademos held a conference call Friday.
Greece is under enormous pressure to get the green light on the bailout so it can move ahead with a related $130 billion debt-relief deal with private bondholders that will take several weeks to implement. That deal has to be completed before March 20, when Athens faces a (euro) 14.5 billion bond redemption it cannot afford.
The last issues to resolve before a bailout is rubber-stamped include making sure the aid program brings Greece's debt down to a sustainable level and setting tighter controls on Athens' spending decisions.
Germany and several other countries want Greece to set up a form of escrow account, separate from the main government budget, that would give priority to servicing Greece's debt over spending on government services.
The European Commission is working on several options including a "transit account" through which Greece's bailout money would be funneled. The account would have a "hierarchy of payments," with servicing the country's debt at the very top, one official said, speaking on condition of anonymity.
