ATHENS, Feb 4: Greece is to resume marathon talks with European and IMF officials on Saturday as negotiations to produce a bailout deal for its crisis-hit economy by next week reached a climax.

Finance Minister Evangelos Venizelos was to meet with senior auditors from the EU, the IMF and the European Central Bank after briefing fellow cabinet ministers on further action needed to unlock a rescue deal worth 130 billion euros ($171 billion).Eurozone finance ministers were also due to confer by telephone later Saturday, after 12 hours of talks on Friday failed to produce a breakthrough.

In parallel to negotiations with its public creditors, pressure is also mounting on Greece to strike a deal with private lenders to wipe out part of its debt, as Athens faces loan repayments of 14.4 billion euros ($19 billion) on March 20.

A report on Saturday said that agreement had been reached to trim Greece’s debt by 170 billion euros, compared to around 100 billion previously, with the European Central Bank and eurozone central banks now joining banks in the write-off initiative.“The deal is expected to close on Tuesday,” a eurozone source told media.

The informed that the ECB would write down around 50 billion euros worth of Greek bonds, and eurozone central banks adding another 10 billion.

The news emerged as negotiators for banks are expected to return to Athens this weekend for further talks.

Meanwhile, Venizelos said that a planned meeting by eurozone ministers on Greece originally scheduled for Monday would now be held on Wednesday.

The three organisations, which rescued Greece in 2010 with an earlier loan, are demanding further labour cost cuts which Greek unions are refusing to concede amid fears that they could worsen an already deep recession.

The coalition backing Greece’s interim government is strongly opposed to the troika’s demands for further civil servant cuts, now reportedly affecting teachers and military staff, and for a reduction in the minimum wage which now stands at 750 euros.

Papademos has reportedly threatened to resign if his coalition backers reject the demanded austerity measures. The government spokesman on Friday declined to comment on the reports.

Greece has been negotiating for months to obtain debt relief under the so-called Private Sector Initiative as a condition for receiving a second international bailout from the EU and the IMF, agreed in October.

Eurozone governments and banks have both been playing hardball for weeks in their bid to reduce by at least half the 200 billion euros in privately held Greek debt. The country’s overall debt stands at 350 billion euros.

Papademos said in a statement Friday that Greece had nearly completed negotiations on the eurozone bailout which depends on the debt writedown.

“We are in the final phase of a very critical procedure to form Greece’s new economic programme and complete a loan deal that will lighten the load of the public debt and ensure the country’s financing for many years to come,” he said.

The finance minister this week said an official offer to creditors must be made by February 15.—AFP