(MENAFN - AFP) Eurozone finance ministers met Monday with the aim of reaching a long-delayed agreement on immediate funding to avert bankruptcy for Greece and how to tackle the country's ever-growing mountain of debt.
"It is essential to take a decision on the disbursement of the next tranche ... in the course of today," Rehn said on arrival for the third meeting in two weeks on the thorny issue.
"Greece has delivered, now it's delivery time for the Eurogroup and the IMF," he added.
At around 1500 GMT, a European diplomat said that the talks were "taking a one-hour break" for Treasury officials to "do (new) sums."
International Monetary Fund Managing Director Christine Lagarde said the talks would see all parties "work towards a credible solution for Greece."
The IMF has been pushing for a so-called "haircut" or write-down of debt by eurozone partner governments in the way banks wrote off most of the loans due to them earlier this year.
German Finance Minister Wolfgang Schaeuble, whose government is one of several creditors opposed to such an approach, said he was "confident we can reach a deal today. We have worked well."
French counterpart Pierre Moscovici added: "Let's assume our responsibilities and come out of this with a deal ... All the parameters for a solution are on the table."
On Sunday, Moscovici said this could involve a combination of cuts in interest paid by Greece and profits made by central banks on Greek debt.
Greece has been waiting since June for a loan instalment of 31.2 billion euros (40 billion), part of a 130-billion-euro rescue granted earlier this year.
In exchange, Athens has pledged to implement a new series of radical austerity measures to cut its annual overspending.
But accumulated Greek debt has now grown to nearly 180 percent of gross domestic product (GDP) and is expected to rise to 190 percent by 2014. That is about three times the EU's 60-percent limit.
The IMF, a major creditor in its own right, has insisted that the figure be brought back to 120 percent of GDP.
This has brought forward the long-term issue of how to get Greece out of its debt trap and who should carry the cost.
European Union (EU) leaders and the European Central Bank (ECB) have said they cannot take losses on loans to Greece.
"For once, it would seem, Greece can take none of the blame," said Carsten Brzeski, an analyst at ING bank.
The Greek government, led by Prime Minister Antonis Samaras, pushed through a fresh batch of deeply unpopular cuts through parliament earlier this month.
As well as the eurozone finance ministers and Lagarde, also in attendance are Mario Draghi, president of the ECB.
The IMF and the ECB, with the EU, make up the troika of creditors which have insisted on Greece adopting the controversial austerity plan.
They have decided to give Greece an extra two years, until 2016, to balance its books. But that means Greece's creditors would have to find another 32.6 billion euros to cover the cost of the two-year respite.
With regard to the debt, Lagarde wants Greece to get this down to 120 percent of GDP by 2020. The head of the Eurogroup Jean-Claude Juncker favours a deadline of 2022.
Merkel hostile to "haircut"
Greece's private creditors have written off more than 100 billion euros in debt, and the IMF has urged the ECB, a public creditor, to accept this solution.
But both the central bank and Germany have so far held out, saying it would violate EU mandates against bankrolling individual countries.
German Chancellor Angela Merkel said Friday: "I'm against this debt write-off and I want to find another solution."
One source close to the talks said that progress had been made during Saturday's round of telephone consultations.
Ministers agreed to cut interest rates on loans which Athens had already signed up to, though they have yet to agree on a revised level, said the source.
The ministers and the ECB have also agreed to lend back to Greece at least some of the gains made on the Greek bonds held by EU partners and the central bank.
And they agreed in principle on a buyout of Greek debt using the eurozone bailout fund, said the source.
According to one Greek ministerial source, the IMF might finally agree to move on this point, settling for a figure equal to 124 percent of GDP.
Austrian Finance Minister Maria Fekter maintained that the eurozone "needs the IMF" to make any deal work.