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Greece's Papandreou to meet Sarkozy and Van Rompuy Greek PM presses EU leaders for new bailout tranche
(about 1 hour later)
Greek PM George Papandreou is to hold further talks with European leaders as negotiations continue in Athens on a new instalment of bailout loans. The Greek prime minister is having a day of talks with fellow EU leaders to approve a new bailout tranche Greece needs to avoid bankruptcy in October.
He is holding talks with European Council President Herman Van Rompuy in Warsaw before travelling on to Paris to meet French President Nicolas Sarkozy. George Papandreou is meeting European Council chief Herman Van Rompuy and others in Warsaw before seeing French President Nicolas Sarkozy in Paris.
International inspectors are in Athens deciding whether Greece should receive bailout funds of 8bn euros (£6.9bn). International inspectors in Athens to decide whether Greece should receive the 8bn euros (£6.9bn; $10.9bn).
The talks have triggered angry protests on the streets of the Greek capital. Protesters forced the rescheduling of a meeting on Friday morning.
Meanwhile, the expansion of a general bailout fund for the eurozone looks on track for approval.
Jean-Claude Juncker, head of the eurozone group of finance ministers (Eurogroup), predicted all of the euro states would have endorsed the expansion by mid-October.
He was speaking to Reuters news agency after the lower house of Germany's parliament backed the European Financial Stability Facility (EFSF) on Thursday in a vote which tested Chancellor Angela Merkel's credibility.
'Charm offensive'
Austrian MPs are also expected to back the expansion when they vote on Friday, with only the parliaments of Malta, the Netherlands and Slovakia left to cast their votes.
The BBC's Chris Morris in Athens says Mr Papandreou is on a charm offensive, trying to convince his European colleagues that Greece can meet the demands imposed upon it by a tough austerity programme.The BBC's Chris Morris in Athens says Mr Papandreou is on a charm offensive, trying to convince his European colleagues that Greece can meet the demands imposed upon it by a tough austerity programme.
The unpopular reforms are vital to guarantee international loans aimed at stopping the debt-ridden country from going bankrupt. The unpopular reforms are vital to guarantee the international loans offered by a troika of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
President Sarkozy said that after his meeting with Mr Papandreou on Friday afternoon he would unveil a Franco-German strategy, but did not give any details. Since eurozone leaders agreed on a second rescue package for Greece this summer, Athens has fallen behind on its debt reduction targets, raising fears of a Greek default.
Many Greeks believe that austerity measures are pushing the country's crippled economy deeper into recession and strangling any chance of growth.
President Sarkozy has said that after his meeting with Mr Papandreou on Friday afternoon he will unveil a Franco-German strategy, but he did not give any details.
Germany and France together represent about half of the 17-nation eurozone's economic output.Germany and France together represent about half of the 17-nation eurozone's economic output.
"It is very important that the Franco-German axis can make its voice heard about the concrete application of the decisions taken at the end of July [on a second rescue package for Greece]," Mr Sarkozy said during a visit to Morocco. German Foreign Minister Guido Westerwelle said that with Thursday's vote in the German parliament: "The signal to our European partners is that you can rely on Germany."
Targets missed Talks disrupted
"After seeing the Greek prime minister... I will have an opportunity to say exactly what our strategy is for supporting countries like Greece," he added. Our correspondent says some analysts believe the whole strategy for Greece, with a possible second bailout, needs urgent readjustment.
Since eurozone leaders agreed on a second rescue package for Greece, Athens has fallen behind on its debt reduction targets, raising fears of a Greek default.
A vote in Germany's parliament on Thursday to back a more powerful bailout fund for eurozone economies was welcomed in Athens.
Mr Sarkozy also congratulated German Chancellor Angela Merkel by telephone on Thursday, his office said, calling the vote a key step in stabilising the eurozone.
Mr Papandreou held talks with Chancellor Merkel in Berlin on Tuesday.
But our correspondent says some analysts believe the whole strategy for Greece, with a possible second bailout, needs urgent readjustment.
That is partly because contagion from Greece to other eurozone countries is no longer a threat but a dangerous reality, he adds.That is partly because contagion from Greece to other eurozone countries is no longer a threat but a dangerous reality, he adds.
Greek taxi drivers held angry protests outside parliament on Thursday on the second day of their 48-hour strike. The troika's team of inspectors found its second day of talks in Athens disrupted on Friday after protesting civil servants occupied the transport ministry, where they had been due to meet the minister, Yannis Ragoussis.
The drivers are opposed to government reforms that would open their closed-shop profession. "Take the austerity package and get out of here!" the civil servants shouted as they stood in front of the shuttered entrance, according to a Reuters news agency report.
Meanwhile, a second round of talks is being held in Athens between the Greek government and inspectors from the "troika" of international creditors supporting Greece - the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). The meeting with the minister was rescheduled as a result.
Many Greeks believe that austerity measures are pushing the country's crippled economy deeper into recession and strangling any chance of growth. Angry protesters against the government's austerity measures have been causing disruption in the Greek capital for months.