Greek gov't optimistic for bridge deal with lenders ahead of Friday's euro group talks

Greek cabinet ministers appeared optimistic on Friday that a bridge agreement between Greece and its European creditors could be clinched during Friday's new extraordinary euro group meeting in Brussels.

Otherwise the two-week deadlock over the formula of bilateral cooperation after the four year bailout expires in late February could be resolved in an emergency EU summit, they said.

"Greece's letter will not change. It has the Finance Minister's signature. It will be done or not be done. There is no half way solution. It is the time of high political responsibility," Minister of State Nikos Pappas told a Greek radio station on Friday, referring to the formal request the country tabled on Thursday for a six-month extension of the bailout loan agreement.

Through this bridge deal Athens asked for more time and a lifeline until it concludes a final agreement on the Greek debt load by autumn.

The newly elected Left-led administration rejects the bailout policies introduced over the past five years to pull Greece back from the brink of default.

Lenders on the other hand add pressure for the continuation of policies which will ensure that the stability and growth program signed in May 2010 will not go to waste and that the austerity and structural reforms will continue.

In case an agreement is not reached on Friday evening, Athens eyed an EU summit next week to deal with the matter, Pappas said.

"We are optimistic that there will be an agreement on Friday, but we cannot be sure," government spokesman Gavriil Sakellaridis told other local media.

"We are struggling hard to reach a mutually beneficial solution," he stressed, dismissing Greek and foreign media reports and comments by political analysts that the government has made an U-turn from pre-election pledges, but still did not satisfy creditors' requests.

"We have not withdrawn our red lines," Sakellaridis said.

Time was pressing. Without a bridging agreement in coming days Greece faces the spectre of financial meltdown and exit from the euro zone. Endit