Greece likely to get its bailout

Greece’s hopes of finally getting its bailout and dodging default next month were boosted Friday when key European leaders, including German Chancellor Angela Merkel, sounded confident a deal could be agreed upon.The leaders of Germany, Italy and Greece are “optimistic” the $170 billion rescue package can be cleared next week, a spokesman for Merkel said Friday after the three held a conference call. Hours earlier, the French prime minister warned against letting Greece default.That means the euro currency union’s main powers are now pushing toward resolving the uncertainty hanging over Greece at a meeting of euro-zone finance ministers Monday.Agreement on the bailout, which comes on top of a $145 billion rescue granted in 2010, has been delayed for months because of doubts over Greek political leaders’ commitment to new austerity measures as well as the worsening economic situation in the country that kicked off Europe’s debt crisis two years ago.Some euro-zone governments’ caution over handing out more money to Athens had investors wondering whether Greece would be forced to default and leave the euro instead. After days of confusion, Germany — the main bankroller for the bailouts — made it clear it wanted to see Greece’s deal through.“The three leaders are optimistic that the finance ministers can find a solution to the pending questions at the Eurogroup on Monday and thereby contribute to the stabilization of Greece,” Steffen Seibert said in a statement after Merkel, Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos held a conference call Friday.Papademos later also called Dutch Prime Minister Mark Rutte, whose country is one of the biggest bailout skeptics.Greece is under big pressure to get the green light on the bailout so it can move ahead with a related $130 billion debt-relief deal with private bondholders that will take several weeks to implement. That deal has to be completed before March 20, when Athens faces a $19 billion bond redemption it cannot afford.Tensions between Greece and the rest of the euro zone hit new highs this week as politicians in Athens and other European capitals blamed each other for the problems related to the bailout. Seven people were detained Friday after an anti-austerity protest in which eggs were thrown at the German Embassy in central Athens.But French Prime Minister Francois Fillon warned that the fallout of letting the country go up in financial flames would be far-reaching.“We must do absolutely everything so that there is not a default by Greece, which would be dramatic for Greeks themselves and dramatic for Europeans,” he said on RTL radio Friday.Now that the Greek Parliament has approved austerity measures demanded by international creditors and banks have agreed to help in the bailout, “the Europeans must now honor their commitments,” Fillon said. “That is the position that France is defending.”Meanwhile, Athens took the first concrete steps toward making sure that a small number of holdouts cannot scupper the debt-relief deal it has negotiated with private investors.The Greek Parliament is expected to soon introduce “collective action clauses” in its outstanding bond contracts. The clauses would force holdouts to participate in the planned bond swap as long as a majority of investors approve.As a prelude to the debt swap, the European Central Bank has started exchanging its holdings of Greek government bonds for newly issued bonds of the same value, according to a euro zone official with knowledge of the matter. Those new bonds would not be retrofitted with collective action clauses, protecting the central bank from being forced into the swap deal.