Greece closer to bailout

Greece edged closer to getting a massive EU-IMF bailout after it pledged to make fresh deficit cuts in return for emergency loans as German opposition to the plan appeared to ease.

"I say quite clearly. Germany will help, if the corresponding pre-conditions are met. That will take a few days," German Chancellor Angela Merkel told reporters in a hastily arranged statement in Berlin.

Merkel also said she had "faith" in Greece's talks with the EU and IMF, adding: "What we need is a quick reaction for the stability of the eurozone."

In Athens, Greek Finance Minister George Papaconstantinou said Greece would announce additional "specific measures and policies" to limit rampant public deficit and debt as soon as the talks are completed.

"Our shared approach is simple, that Greece must drastically cut its deficits in coming years, check its debt and make all structural adjustments to render the Greek economy more competitive," he said in a statement.

He added that the proposals of the International Monetary Fund -- whose involvement has raised hackles in Athens -- are "not particularly different" to those of the European Union and the European Central Bank.

Greece desperate for EU-IMF bailout

Greece is scrambling to get an EU-IMF financial package worth 45 billion euros (60 billion dollars) in place following months of debt crisis and ahead of a May 19 deadline to pay bondholders nine billion euros.

"There is a critical date for Greece and that is May 19. It is the date when bonds of around nine billion euros will reach maturity," Papaconstantinou told parliament.

"Up until then our borrowing needs are covered but the market conditions... are completely prohibitive for a new debt sale on the markets," he said.

Slashing public deficit

Greece has set itself the unprecedented task of slashing its public deficit to 8.7 percent of output this year by reining in spending and boosting tax income. The European Commission last week estimated the deficit at 13.6 percent.

Athens is also labouring to reduce its public debt from its current level of nearly 300 billion euros but its efforts have been badly undermined by steeply rising borrowing costs as investors fear a default is looming.

The rate at which Greece would have to borrow new 10-year funds on the market spiked at 9.401 percent -- the highest rate since Greece joined the eurozone in 2001, indicating concern over a possible debt default.

With the euro down against the dollar once more, French President Nicolas Sarkozy and EU commission chief Jose Manuel Barroso issued a joint demand for "quick and resolute action" against speculators.

Decision made within days

The commission and the European Central Bank are due to deliver their assessment of Greece's needs within days, and ECB chief Jean-Claude Trichet said he was confident a deal would emerge from the talks.

"I am confident they will be concluded soon and rightly," he said in New York.

Greece also had unforeseen domestic concerns to deal with as its air force pilots refused to fly non-emergency missions to protest against cuts in state spending including for the military.

And the government stood accused of handing the country over to the IMF under a complex loan rescue mechanism that failed to offer quick relief.

"(Greek Prime Minister) George Papandreou pushed the button of a mechanism that is not operational," wrote Dimitris Mitropoulos, a columnist in top-selling Ta Nea daily.

"The wiring has not been connected and most importantly, the voltage needed has not been set," he added, noting that Greece's actual loan needs could run to 150 billion euros according to some estimates.

The potential involvement of the IMF has met a poor response amid fears that it could prescribe austerity cuts that will further undermine Greece's recession-hit economy.

Conservative opposition leader Antonis Samaras accused the government of placing the country under "suffocating" IMF control while the leading union spoke of a "particularly painful" development which called for mobilisation.

Greek unions have already staged a series of general strikes, work stoppages and street protests against the government's crisis cutbacks.