Greece and its private creditors head back to the negotiating table on Saturday to put together the final pieces of a long-awaited debt swap agreement needed to avert an unruly default.
After weeks of muddling through round after round of inconclusive talks, the negotiations appear to be in their final phase with both sides hoping to secure a preliminary deal before Monday's summit of euro zone leaders.
The debt swap, in which private creditors are to take a 50% cut in the nominal value of their Greek bond holdings in exchange for cash and new bonds, is a pre-requisite for the country to secure a 130-billion-euro rescue package.
Prime Minister Lucas Papademos told Reuters in an interview he expects the debt talks to be concluded within days.
"We made significant progress over the last few weeks and in the last few days in particular. We are trying to conclude the discussions as quickly as possible. I am quite optimistic an agreement will be reached in the coming days," he said.
Still, concern has grown that the deal may not do enough to get the country's debt reduction plan back on track, and that Greece's European partners will be forced to stump up funds to cover the shortfall.
Athens also faces problematic talks with the "troika" of foreign lenders - the European Commission, IMF and European Central Bank - who have warned it needs to do more to drive through painful reforms before they dole out any more money.
"There is a lot of work to be done because at the same time we have the negotiations for the new [bailout] programme," a Greek finance ministry official said.
"It's all very dense, difficult and crucial. There is optimism because the country needs to survive and we need to protect its citizens because they have suffered a lot."
Athens and its creditors have broadly agreed that new bonds under the swap would probably have a 30-year maturity and a progressive interest rate. The deal is aimed at chopping 100 billion euros off Greece's crushing 350-billion-euro debt load.
But they have wrangled for weeks over the interest rate Greece must pay on the new bonds and pressure has grown in recent days on the European Central Bank and other public creditors to accept a cut in the value of their Greek bond holdings like the private sector creditors.
A debt deal must be sealed in about three weeks at the latest as Greece has to repay 14.5 billion euros of debt on March 20. Otherwise Greece will sink into an uncontrolled default that might spread turmoil across the euro zone.
Papademos promised on Friday this would not happen. "Greece will not default," he said.
Senior euro zone officials have also expressed optimism on the debt deal, though previous predictions of an imminent agreement have failed to become reality.
Greece is in its fifth year of recession, with hopes of a quick exit of the crisis receding rapidly due to squabbling politicians, rising social anger and an inability to get its debt load under control.
