Greece is on track to complete a draft deal with international creditors on a third bailout by next Tuesday with a possible first disbursement by Aug. 20, a source familiar with a conference call of senior EU finance officials on Friday said.
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Talks are proceeding smoothly and may be completed over the weekend, the source said. If a draft memorandum of understanding and an updated debt sustainability analysis are ready as planned on Tuesday, the Greek government and parliament would be expected to approve them by Thursday.
Euro zone finance ministers could then meet or hold a teleconference on Friday to endorse an up to 86 billion euro three-year loan program for Athens, the source said.
Greece would be expected to enact another package of reform legislation before Aug. 20, in parallel with national ratification procedures so it could receive a first aid payment in time to meet a crucial bond payment to the European Central Bank on Aug. 20, the source added.
"Everyone is working on Plan A - a deal with disbursement by Aug. 20," the source said.
The negotiations began on July 20, a week after euro zone leaders agreed at an acrimonious all-night summit on stringent conditions for opening negotiations with Greece on a third bailout to save it from bankruptcy and keep it in the euro zone.
The source said no major differences had emerged among creditor nations on the one-hour call of the Economic and Financial Committee of deputy finance ministers, partly because there was nothing immediate to decide.
Some countries, led by Germany, were keen to nail down more specific long-term reform commitments in addition to the immediate actions to be implemented, the source added.
(Writing by Paul Taylor)