Greece is close to securing a deal with the European Union and the International Monetary Fund on Friday on a multi-billion euro aid package, a day after Athens police clashed with protesters objecting to austerity measures, according to dpa. Officials from the European Commission, the International Monetary Fund and the European Central Bank are putting the final touches on a reform package that will allow Athens to tap eurozone and IMF emergency loans worth more than 100 billion euros. The multi-billion euro rescue package is desperately needed by May 19 in order to avoid a debt default in Greece that could sink other fragile eurozone countries. Greek unions, already reeling from austere budget cuts imposed for 2010, said IMF officials have asked the government to scrap salary bonuses that are worth two months' wages, impose a three-year pay freeze and raise the value added tax. International officials will also ask for: an increase in the retirement age from the current average of 62 to 67, and a public sector hiring freeze. The conditions outlined for the release of the emergency aid are expected to be announced by the Greek government by Sunday. Many believe that, while Greece will have enough money to avoid default in the coming weeks, the future remains uncertain as the government will likely come up against increased resistance from the public to more cuts. Trade unions have said that they will increase their demonstrations against the austerity measures just as hundreds of protesting teachers clashed with riot police late Thursday in front of the finance ministry. Unions have called for a series of strikes across Greece on May 5 in reaction to the harsh conditions they say it will impose on low to middle income workers. A large majority of Greeks, 61 per cent, disapprove of their government's decision to turn to the EU and IMF for emergency aid, according to an opinion poll released Tuesday. After weeks of heavy losses, markets and the euro, rallied at the news that the deal was close to be finalised. Market confidence in the single currency had been shaken this week by the global rating agency Standard & Poor's (S&P) decision to downgrade the credit worthiness of Greece, Spain and Portugal, the three countries in the eurozone facing the most immediate deficit crises. The spiralling crisis led Germany to finally bow to international pressure to speed up the rescue operation, after initially holding a tough stance. Berlin ensured that it would help Greece, as long as conditions are met. "If the stability of the eurozone as a whole is in danger, every member state, including Germany of course, feels committed to this stability," German Chancellor Angela Merkel said following talks in Berlin with IMF chief Dominique Strauss-Kahn. Despite Rehn's insistence Thursday that the rescue package was necessary, not just for Greece, "but for every euro area member state and (for) their citizens to safeguard financial stability in Europe and globally," German public opinion remained unconvinced. Public suspicion against Greece is thought to have contributed to Germany's reluctance, especially given the May 9 state elections in North Rhine-Westphalia, which could cost Merkel's centre-right coalition the majority in the upper house of the parliament. But even if the EU commission and IMF were to announce conditions for the loans over the weekend, actual disbursement of the aid is dependent upon final approval by euro area leaders. A summit between them is foreseen in Brussels around May 10, one day after the Norht Rhine-Westpalia vote.
