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Sunday, 02/19/2012 6:14:59 PM

Sunday, February 19, 2012 6:14:59 PM

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Angela Merkel, Mario Monti and Lucas Papademos ‘confident’ deal on €130bn (£108bn) bailout would be struck on Monday, but concerns are growing behind the scenes.

The German news weekly Der Spiegel reports that a majority of eurogroup finance ministers are readying themselves for a collapse of the latest rescue package on Monday – or, at least, leaving it to a planned EU summit on 1 March to decide.

Greek hopes of winning the final go-ahead for a new €130bn (£108bn) bailout when eurozone finance ministers meet on Monday could be shattered even though Athens has agreed to further bruising savings.

The optimism seeped into global markets with the Dow Jones rising towards 13,000 points in New York and the FTSE 100 inching close to the 6000-mark. But, behind the scenes, sources indicated it could be seriously misplaced.

“Scepticism is especially strong among the AAA-rated states (Germany, Finland, the Netherlands) whether Greece can turn it around,” said Maria Fekter, Austrian finance minister. “The threat of a Greek default is not off the table.”

In Berlin officials rebutted widespread reports of a growing rift between Merkel, who backs Greece staying a member of the euro, and Schäuble.

Amid growing evidence of a significant split between Merkel and her finance minister Wolfgang Schäuble on a new Greek bailout, some officials spoke darkly of Athens being allowed to default within the eurozone by early summer.

In a seemingly endless tussle between stability and solidarity, finance ministers could end up agreeing to the bailout but only in tranches – with the first one, required for Greece to repay €14.5bn of debt by 20 March, held in an escrow account. This account would be topped up only if Athens did indeed service its debts and implement reforms.

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