After months of acrimonious debate, eurozone ministers and the IMF were locked in closed-door talks seeking to close a combined 230-billion-euro ($300 billion) bailout for Greece — but without increasing the volume of loans from public purses.

Under the terms of an October agreement between eurozone leaders, the writedown was to chop 100 billion euros from Greece’s 350-billion total debts.

Sweeteners for Greek banks worth 30 billion euros, plus further guarantees to underwrite a bond swap the eurozone wants to launch formally on Wednesday, are also needed to reach the remaining 130 billion.

Athens faces debt repayments of about 14.5 billion euros on March 20, otherwise it could be classed as bankrupt.

Hardliners in the eurozone insist the final deal must stick to the October arrangement.

That is a problem because an analysis of Greek debt dynamics produced by the EU and the IMF shows that with the country into a fifth year of recession, another 5.5 billion must be found to ensure Greek debt falls from around 160 percent of GDP to 120 percent of output by 2020.

On entering the talks, Austrian Finance Minister Maria Fekter said that the private sector could be asked to “help a bit more.”

A Greek finance ministry source had said shortly beforehand that Venizelos was holding a “parallel negotiation” with the International Insititute of Finance (IIF), including chairman and Deutsche Bank chief Josef Ackermann.

After months of bitter debate, approval appeared in the offing, with IMF chief Christine Lagarde praising Greece’s “great efforts” towards economic reform and hardline German Finance Minister Wolfgang Schaeuble also declaring himself confident of a rescue deal to avert imminent default.

Joining the talks with ministers from the 17-nation euro area, Lagarde said: “Greece has evidently made great efforts and now we must continue the work.”

Greek Prime Minister Lucas Papademos arrived at the venue for the talks at around 3:10 pm (1410 GMT).

Schaeuble said that after six months of wrangling, euro nations were nearing the point where they can finally agree on a writedown of privately-held government debt worth 100 billion euros as well as guarantees and loans eventually adding up to another 130 billion euros.

Greece sees “a long period of uncertainty coming to a close today, a period that benefited neither the Greek economy, nor the euro area overall,” Venizelos said after months that saw eurozone hardliners’ patience with Greece almost snap and suggestions Athens be cut adrift.

European Union partners see Greece as the victim of chronic financial mismanagement by dynastic political forces — what Italian Prime Minister Mario Monti last week called a “perfect catalogue” of errors.

Most analysts consider that if Greece were to default, the consequences for the Greek people would be catastrophic, even if less dangerous now for the rest of the eurozone than would have been the case last year.

In Washington, US Treasury Secretary Timothy Geithner said the United States backed the idea of a new IMF loan for Athens.

The Group of 20 major economies will meet later this week in Mexico seeking to boost IMF lending resources.

If agreed, a bond swap with private investors would be launched on Wednesday, right on time for Athens as it faces debt repayments of about 14.5 billion euros on March 20.

But full delivery of the rest of the package, as well as IMF assistance, will be contingent on Greece enacting deeply unpopular spending cuts and reforms ordered by the EU and International Monetary Fund.

Debt reduction targets have veered off course with Greece now in a fifth year of recession but a senior official told AFP there was still a 5.5-billion euro hole in the figures.

Ahead of a general election in April, surveillance of day-to-day economic management is critical after the failure of an initial 110-billion-euro EU-IMF rescue package approved nearly two years ago.

After weeks of what officials said was “deliberate pressure” to get the ruling class in Athens to stick to promises of change, the new bailout has been likened to the aid equivalent of a hospital drip.

Germany and the Netherlands still need to get the second bailout past their sceptical parliaments.

A small army of EU officials is building up in Athens to make sure Greece delivers on its pledges including a 22 percent reduction in the country’s minimum wage and a 12-percent cut to pensions of more than 1,300 euros a month.

“Greece must be shadowed on its reform path so that the money arrives where it is meant to,” said Austrian Finance Minister Maria Fekter.

On top of 3.2 billion euros in the latest spending cuts, Greece agreed to open a blocked, or “escrow” account to ensure that aid for repayments to government creditors is set aside and not used for other purposes.

Thousands of people protested in Athens and Thessaloniki on Sunday, one week after rioters set fire to buildings in the Greek capital to protest new cuts approved by the parliament.

Finally parking the Greek problem to one side this week would allow eurozone leaders to focus on building a financial firewall for the currency as a whole at a March 1 and 2 summit.

They also urged work on Europe’s energy market and the digital economy, alongside a call for an end to easy state guarantees for Europe’s banking system.

“We meet in Brussels at a perilous moment for economies across Europe,” begins the letter which was also signed by Estonia, Latvia, Finland, Ireland, the Czech Republic, Slovakia and Sweden.

Much emphasis falls on trade arrangements, with a global accord through the World Trade Organization (WTO) slipping away after a decade of troubled talks.

Formal Free-Trade Agreements (FTA) with a host of partners led by India, Canada and ex-Soviet neighbours should be done this year, the leaders said, while the March summit will also look to develop trade relations with Arab southern Mediterranean neighbours.

But as well as pushing deals with Asian and Latin American trading blocs, and negotiations with Japan “launched before the summer,” the Conservative leaders also want to re-focus negotiations on the EU’s biggest partners.

“We need to inject political momentum into deepening economic integration with the US, examining all options including that of a free trade agreement,” they wrote.

Work should also “seek to deepen trade and investment relations with Russia” and the EU should further “launch a strategic consideration of our trade and investment relationship with China,” underlining “rules-based trade.”

The leaders set a target date of 2014 to conclude “a genuine, efficient and effective internal energy market,” and a deadline of 2015 for a “truly digital single market.”

But they also seek to draw a line under state support for banks.

“Implicit guarantees to always rescue banks, which distort the single market, should be reduced,” they wrote.

“Banks, not taxpayers, should be responsible for bearing the costs of the risks they take,” they said, just as eurozone finance ministers gathered to give a probable green light to a new massive rescue for Athens.

The EU summit was already scheduled to tackle aspects of this growth and trade agenda, although talks among eurozone leaders on boosting a collective financial firewall are likely to dominate.

France and Germany last month put forward to Van Rompuy their own vision of how the EU should best marshall its resources to encourage economic revival.

An EU official told AFP that France is putting the accent primarily on FTA negotiations with the Southern Mediterranean.

This emphasis gave rise during talks among officials from the 27 EU governments last week to unease among some eastern EU states more concerned with their neighbours in Russia’s ex-Communist sphere of influence.

The airline said it was forced to curtail its services after tax authorities froze its bank accounts reportedly due to its inability to clear its unpaid service taxes.

“This has severely affected our ability to make operational payments, leading to the current curtailment,” Kingfisher said in a statement on Monday.

“We are appealing to them to see reason that inconvenience to the travelling public is not in anybody’s interest and are in talks to get (bank accounts) unfrozen.”

Kingfisher added that its chief executive Sanjay Aggarwal had been summoned for a meeting with the Directorate General of Civil Aviation on Tuesday.

“We will appear before the DGCA tomorrow and submit all details they want and also a plan to restore the full schedule,” the airline’s statement said.

Kingfisher, which announced a third quarter loss of $88 million last week, has been beset with difficulties caused by soaring fuel costs and high local sales taxes, as well as a domestic price war.

At the weekend, the airline blamed some of the disruptions — the second batch since November — on bird strikes. It said a full daily schedule of 240 flights should return to operation over this week.

Flight cancellations have hit passenger confidence hard and left stranded travellers fuming.

“At the airport I was told my flight is delayed and there is no clue when it will fly,” private bank executive Amit Vij told AFP at Mumbai airport as he tried to return to the northern city Chandigarh.

“They did not call, SMS or email me in advance. Even the helplines are not responding.”

But the airline says it is re-booking passengers on rival carriers and also offering full refunds.

The Bangalore-based Kingfisher, owned by brewing magnate Vijay Mallya, has never posted a net profit since it started operating in 2005.

It has seen its passenger market share slump to 12 percent in recent months, with its ranking on the list of India’s largest airlines falling from second to fifth.

India’s civil aviation minister Ajit Singh reiterated on Monday that private firms such as Kingfisher could not expect any aid package.

“The government is not going to ask banks to bail out any private airline, or any private industry for that matter,” Singh told the NDTV news channel.

India’s airline industry — once a symbol of the country’s economic progress — is now plagued by high fuel prices, fierce competition, price wars and inadequate airport infrastructure, with Kingfisher one of the worst-hit firms.

The company’s shares closed Friday at 26.6 rupees, down 39 percent from a year earlier. Markets were closed Monday due to a holiday.

A quarter of Kingfisher is owned by local banks and some have refused to lend the company more cash unless fresh capital is raised.

Questions about the firm’s financial viability grew after it axed its low-cost Kingfisher Red service to concentrate on its full-fare business in September.

“Kingfisher will soon have to consider limiting operations to bleed less, besides selling and leasing back some aircraft to lower debt,” said a Mumbai-based aviation analyst on condition of anonymity.

Kingfisher has a 64 aircraft fleet, flying to 46 destinations in India and eight overseas.

“A good part of this crisis originates in erroneous decisions and excessive and abusive risk-taking by private and public financial institutions,” added Calderon, whose country currently presides the G20 group of major developed and developing nations.

Senior officials from the G20, including US Secretary of State Hillary Clinton, are holding two days of informal talks in the Mexican resort of Los Cabos ahead of a full summit there in June.

However, only nine foreign ministers are taking part in the talks. Russia, China, India and Brazil, which lead the important bloc of emerging economies, are not represented at the ministerial level.

G20 finance ministers and central bank heads were also due to meet in Mexico City next weekend to discuss ways to increase funding for the International Monetary Fund in the face of Europe’s debt crisis.

De Jager, whose coalition government in The Hague has to get the bailout past an increasingly sceptical Dutch parliament, said partners committed to providing Greece money for years to come need “some kind of permanent presence” dictating policy on the ground, “not every three months.”

He was referring to quarterly reports produced by the “troika” which have in some instances held up disbursement of funds under Greece’s initial 110-billion-euro bailout first agreed in May 2010.

Dutch Prime Minister Mark Rutte recently floated the idea that the eurozone could cope with a Greek exit from the currency area much more easily than 18 months ago.

With signs that key partners from Germany to the IMF are now ready to approve the latest Greek rescue package, De Jager stressed: “It is very important when you loan money that you are the boss” when it comes to deciding when and how planned loans are made available.

In this little red house, alongside the railway line, the homeless come to find warmth and shelter, clothing, food or at least psychological support.

Klimaka, a non-governmental group formed in 2000 and backed financially by the health, foreign affairs and labour ministries, aims to help those who have lost the most.

In Athens, the profile of a homeless person has changed with the economic crisis, said Effie Stamatogiannopoulou of Klimaka.

“Before, the categories of people on the streets were immigrants, alcoholics and drug addicts,” said Stamatogiannopoulou, a professional nurse.

In the past two years however “our data show a 25 percent increase of homeless people who have no such problems but are simply unemployed,” she added.

The latest figures confirm this trend: 20 percent of the active population is unemployed and almost half of those — 48 percent — are younger than 25.

Among some 400 people who come to the Klimaka centre every week is 33-year old Lorenzo Braimi, originally from neighbouring Albania.

Living in Athens for 18 years, Braimi lost his job as an electrician six months ago. Now, with a pen in his hand, he carefully checks newspaper ads.

“I couldn’t pay my rent anymore and I ended up in the street. For several days I stayed with friends who eventually advised me to come to this association,” Klimaka, he said.

For ten days now, he has come here every morning to check the papers and use the centre’s phone to reply to the ads for jobs.

“I am not afraid of any work,” he insisted, even asking visiting AFP reporters whether there is a “little job for me in your company?”

Petros, 56, shuns the media. A former seaman, he has been unemployed for the past three years, blaming his predicament on growing competition from Turkish and Filipino sailors.

With a salary of around 2,000 euros ($2,600) per month for a working week of around 50 hours, Petros could not compete with manpower paid only 600 euros per month.

Living on the streets for two years now, he constantly looks for a bed to spend the night. He has two brothers, but they “are both unemployed.”

“In Greece, the problem of the homeless is recent,” said Christos Papatheodorou, social politics professor at the Democritus University of Thrace.

The family, traditionally a bastion of solidarity in Greece, has so far contained the problem during the crisis, “but the situation risks to explode,” warned Stamatogiannopoulou.

According to the statistics bureau ELSTAT, more than three million of Greece’s population of 11 million — or 27.7 percent — were close to poverty or social exclusion in 2010, at the very start of the crisis.

Things have become much worse since.

Papatheodorou noted that EU statistics agency Eurostat and national statistics offices base their figures on a typical household, that is, on those having a roof above their heads.”

“Therefore, the increase of extreme poverty among homeless people does not appear in the statistics,” he said.

Klimaka estimates that 20,000 people live in the streets of Athens nowadays.

George Kaminis, the capital’s mayor, told Ethnos daily last December that the number of homeless has increased by 20 percent compared to the previous year.

Papatheodorou worries about the future.

“Worsening pay, all these cuts, notably in public services and social security system, risk increasing poverty even more,” he warned.

Greek Finance Minister Evangelos Venizelos said on arrival that he was “optimistic” of a deal and IMF chief Christine Lagarde praised Athens’ “great efforts” to overhaul its economy.

But hardline Dutch Finance Minister Jan Kees De Jager demanded the EU and IMF take “permanent” control of government decision-making over revenues and public expenditure in Greece.

De Jager said partners committed to providing Greece money for years to come need “some kind of permanent presence” dictating policy on the ground.

At stake in the rescue of Greece is a writedown of privately-held government debt worth 100 billion euros as well as guarantees and loans eventually adding up to another 130 billion euros.

That despite grinding negotiations with private creditors on the sidelines of talks among finance ministers in Brussels, principally over a 5.5-billion-euro gap needing to be filled if Germany and the Netherlands especially are to get the agreement past their national parliaments.

Greece’s Prime Minister Lucas Papademos and Finance Minister Evengelos Venizelos took turns scuttling in and out of talks with the representatives of the banks, officials said.

A mini-breakthrough was reached just after midnight (2300 GMT Monday) when national eurozone central banks agreed to engage in their own write-down of Greek bonds.

“There’s a long way to go yet, but we wouldn’t still be in there if we didn’t think we would get there tonight,” said one eurozone governmental source.

Greece, Germany, the IMF and the head of the Eurogroup of finance ministers, Jean-Claude Juncker, each maintained that a deal could be reached during the closed-door talks.

European Union and International Monetary Fund partners have set a target of reducing Greek debt levels to 120 percent of gross domestic product (GDP) by 2020, still steepling high but down from around 160 percent at present.

The 5.5-billion-euro gap comes about because the latest analysis suggests that even with a bailout, Greek total debt would only fall to 129 percent of GDP.

Venizelos said on arrival that he was “optimistic” of a deal, signalling “a long period of uncertainty coming to a close today — a period that benefited neither the Greek economy, nor the euro area overall.”

A “confident” Wolfgang Schaeuble, his German counterpart, seemed to echo the sense that an agreement was in the making late-afternoon, while IMF chief Christine Lagarde also praised Athens’ “great efforts” to overhaul its economy.

But Dutch Finance Minister Jan Kees De Jager signalled a long night ahead when he demanded that the EU and the IMF take “permanent” control of decision-making over revenues and public expenditure in Greece.

De Jager said partners committed to providing Greece with money for years to come need “some kind of permanent presence” dictating policy on the ground, saying lenders should be “the boss.”

The Greek rescue plan under discussion is structured as follows:

– a writedown of privately-held government debt worth 100 billion euros;

– a series of sweeteners for Greek banks, and guarantees in case private creditors do not take up the bond-swap offer to be launched on Wednesday in sufficient numbers;

– and loans eventually adding up to another 130 billion euros.

Athens faces debt repayments of about 14.5 billion euros on March 20, otherwise it could be classed as bankrupt.

Full delivery of the rest of the package, as well as IMF assistance, will be contingent on Greece enacting deeply unpopular spending cuts and reforms demanded by its partners.

Belgian Finance Minister Steven Vanackere and others warned that Greece must deliver, “not only today, but in the weeks, months and years to come.”

Eurozone hardliners’ patience with Greece almost snapped over recent weeks with growing suggestions Athens could be cut adrift and that the eurozone would suffer less damage from such an approach than 18 months ago.

Many euro partners see Greece as the victim of decades of chronic financial mismanagement by dynastic political forces — what Italian Prime Minister Mario Monti last week called a “perfect catalogue” of errors.

Ahead of a general election in April, the new bailout has been likened to the aid equivalent of a hospital drip.

Surveillance of Greece’s day-to-day economic management is critical after the failure of an initial 110-billion-euro EU-IMF rescue approved nearly two years ago.

A small army of EU officials is building up in Athens to make sure Greece delivers on pledges including a 22 percent reduction in the country’s minimum wage and a 12-percent cut to pensions of more than 1,300 euros a month.

On top of 3.2 billion euros in the latest spending cuts, Greece has agreed in principle to open a blocked, or “escrow” account to ensure that aid for repayments to government creditors is set aside and not used for other purposes.

After repeated violent protests, finally resolving the Greek problem would allow eurozone leaders to focus on building a financial firewall for the currency bloc as a whole at a March 1 and 2 summit.

The budget pact, which EU leaders agreed in principle in December, calls for signatories to add a “golden rule” requiring balanced budgets to their national constitutions.

The pact is to apply at the very minimum to the 17 eurozone members, as well as any other EU countries that want to adhere to it. All have said they were willing to discuss it, except Britain.

However Czech Prime Minister Petr Necas last month pronounced a “clear no” to the pact.

Hungarian Prime Minister Victor Orban had initially rejected joining the budgetary pact, before finally agreeing to sign on arguing that its strictures would only be implemented after Hungary joined the eurozone.

In parliament, Orban said “all points in the pact” were acceptable to Hungary.

The budget measures are set to be implemented on January 1, 2013.