Greece hopes to conclude bailout talks by Aug. 11

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Greece Sees Bailout in Sight


Greece hopes to conclude negotiations with international creditors by early Tuesday at the latest, a Greek official said as talks continued in Athens on a new multi-billion euro bailout designed to keep the country from financial ruin.

Greece's finance and economy ministers were locked in negotiations with representatives of creditors on Sunday, which stretched until the early hours of Monday. Greek officials have previously said they expect the bailout accord to go to the country's parliament for approval by Aug. 18.

"Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday," said a Greek official who declined to be named.

"When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions," the official said, referring to measures Greeceneeds to take for the bailout accord to take effect.

A second official said: "From 12 midnight the two sides started the final stretch, discussing the final stretch - combing through the final text, sentence by sentence, word by word."

The negotiations began on July 20. A senior Greek finance official told Reuters the aim was for euro zone finance ministers to review the accord on Friday, Aug. 14.

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Greece hopes to conclude bailout talks by Aug. 11
ATHENS, GREECE - JULY 20: People wait to enter a bank branch as Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JULY 20: People queue to get money from ATMs as Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JULY 20: People wait to enter a bank branch as Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JULY 20: A National Bank official opens the door of a bank branch as people enter after Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
People enter a branch of a national bank in Athens on July 20, 2015. Greek banks reopened after a three-week shutdown imposed to stop mass cash withdrawals crashing the financial system, but citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country's creditors. The shutdown since June 29 is estimated to have cost the economy some 3.0 billion euros ($3.3 billion) in market shortages and export disruption. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
People wait to enter a bank on July 20, 2015 in Athens. Greek banks reopened on July 20 after a shutdown lasting three weeks imposed by the government to avert a crash in the banking system over the country's debt crisis. However, capital controls in force since June 29 remain in place, although a daily cash withdrawal limit of 60 euros ($65.03) has now been relaxed to a weekly restriction of 420 euros. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
People enter a bank in central Athens on July 20, 2015. Greek banks reopened on July 20 after a shutdown lasting three weeks imposed by the government to avert a crash in the banking system over the country's debt crisis. However, capital controls in force since June 29 remain in place, although a daily cash withdrawal limit of 60 euros ($65.03) has now been relaxed to a weekly restriction of 420 euros. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JULY 20: People queue to get money from ATMs as Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
The first customers, most of them pensioners, stand in a queue to enter a branch at National Bank of Greece headquarters in Athens, Monday, July 20, 2015. Greek banks reopen on Monday morning, but many restrictions on transactions, including cash withdrawals, will remain. Also, many goods and services will become more expensive as a result of a rise in Value Added Tax approved by Parliament last Thursday, among the first batch of austerity measures demanded by Greece's creditors. (AP Photo/Thanassis Stavrakis)
People enter a bank in central Athens on July 20, 2015. Greek banks reopened on July 20 after a shutdown lasting three weeks imposed by the government to avert a crash in the banking system over the country's debt crisis. However, capital controls in force since June 29 remain in place, although a daily cash withdrawal limit of 60 euros ($65.03) has now been relaxed to a weekly restriction of 420 euros. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JULY 20: A National Bank official opens the door of a bank branch as people enter after Greek banks reopened on Monday morning after three weeks of closure on July 20, 2015 in Athens, Greece. Many restrictions on transactions will remain and a lot of goods and services will become more expensive as a result of a rise in value added tax (VAT) approved by Parliament last Thursday, which is among the first batch of austerity measures demanded by Greece's creditors. (Photo by Milos Bicanski/Getty Images)
A policeman guards outside of a bank in central Athens on July 20, 2015. Greek banks reopened after a three-week shutdown imposed to stop mass cash withdrawals crashing the financial system, but citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country's creditors. The shutdown since June 29 is estimated to have cost the economy some 3.0 billion euros ($3.3 billion) in market shortages and export disruption. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
People wait outside a bank in central Athens on July 20, 2015. Greek banks reopened after a three-week shutdown imposed to stop mass cash withdrawals crashing the financial system, but citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country's creditors. The shutdown since June 29 is estimated to have cost the economy some 3.0 billion euros ($3.3 billion) in market shortages and export disruption. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
People wait to enter a bank, prior its opening on July 20, 2015 in Athens. Greek banks reopened on July 20 after a shutdown lasting three weeks imposed by the government to avert a crash in the banking system over the country's debt crisis. However, capital controls in force since June 29 remain in place, although a daily cash withdrawal limit of 60 euros ($65.03) has now been relaxed to a weekly restriction of 420 euros. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
Fishmongers man their stalls at Athens' central fish and seafood market on July 20, 2015. Greek banks reopened Monday after a three-week shutdown imposed to stop a run on ATMs from crashing the financial system, but citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country's creditors. Taxes went up on many products and services from sugar and cocoa to condoms, taxis and funerals, from 13 percent to 23 percent. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
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Athens is negotiating with European Union institutions and the International Monetary Fund for up to 86 billion euros ($94 billion) in fresh loans to stave off economic collapse and stay in the euro zone.

The bailout must be in place by Aug. 20, when Greece has a repayment falling due to the European Central Bank.

One senior EU official said there had been "outstanding cooperation" from the Greek side, which was keen to have a deal in place the soonest possible.

But the official said sticking points for some member states was still the size of the overall bailout, which some wanted reduced from the up to 86 billion agreed at the euro summit last month because of the political sensitivity.

For the Greek side, Greek sources said a key source of concern was how to deal with a mountain of non-performing loans in the banking sector, a factor likely to weigh on a potential recapitalization bill for the banks.

The Greek side wants to set up a 'bad bank' to handle this, while creditors want non performing loans bundled and sold to distressed asset funds. Non performing loans represented about 35 percent of overall loan portfolios in the first quarter of 2015, a level likely to increase during recent weeks from the imposition of capital controls.

The size of the first tranche, which is likely to be at least 20 billion euros, was also a source of some concern among lenders.

Of that figure, Greece needs a 10 billion euro buffer for bank recapitalization, 7 billion to reimburse the bridge loan for July and more than 3 billion to pay the ECB in August.

"Until the MoU is on the table and signed, we are still cautious," the EU official said.

(Reporting By George Georgiopoulos, additional reporting by Jan Strupczewski; Writing by Michele Kambas; Editing by Digby Lidstone)

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