The leader of the rightwing Laos party, junior partner in the Greek coalition government, has appealed to the European Union to ease the terms of the country’s second €130bn bail-out, or risk triggering a “social explosion”, the Financial Times reported. The passionate plea from George Karatzaferis came as Greek officials are scrambling to meet a deadline on Friday to restructure €200bn of debt controlled by private bondholders, an essential condition for the next rescue plan.

Greece must make "difficult" decisions in the coming days to clinch a debt swap agreement and a 130 billion euro ($170 billion) bailout package needed to avoid an unruly default, the government said on Tuesday, Reuters reported. Near-bankrupt Greece is struggling to convince skeptical lenders it can ram through spending cuts and labor reform to help bridge a funding shortfall driven by a worsening economic climate and its previous reform plan having veered off track. With a long-awaited debt swap deal largely almost secured, Athens' focus is now squarely on the reform front.

Investors participating in a deal to slash Greece's massive debt would face an overall loss on their bond holdings of more than 70 percent, a person involved in with the negotiations said early Tuesday, the Associated Press reported. European leaders at a summit in Brussels said a final debt deal could be signed off in the coming days, together with a second multibillion-euro bailout packaged designed to save the country from a potentially disastrous bankruptcy.

Greece's Alpha Bank, the country's third-largest lender by assets, said Monday it was freezing plans to merge with cross-town rival EFG Eurobank Ergasias SA pending further details over a EUR100 billion debt write-down Greece is now negotiating with creditors, Dow Jones reported. In a statement issued to the Athens stock exchange, the bank said it would call a meeting of shareholders to seek fresh approval for the tie-up. It hinted that the debt talks--known as the Private Sector Involvement--could overturn the financial benefits of the deal.

Negotiations between Greece and its creditors to reduce its debts have developed into an impasse because the nature of the creditors has changed since the scheme to involve private sector investors on a voluntary basis was first mooted nearly a year ago, International Financing Review reported in an analysis. Back then private sector bondholders made up the majority of Greece’s €350bn debts. However, as loans from the original €110bn bailout package have been deployed, principally to pay back maturing bonds, the IMF and European Union countries have built sizeable stakes.

Greece came under heavy pressure at a meeting of eurozone finance ministers on Monday to revamp a stalled debt restructuring deal with private bondholders and accelerate structural reforms in order to avert a disorderly default, the Financial Times reported. Ministers from Germany and the Netherlands rounded on their Greek counterpart and urged him to deliver on promised reforms to the economy, in a sign that patience with Athens is wearing thin just as eurozone members begin to finalise the details of a second bail-out package.

Debt-crippled Greece has named some 4,000 alleged tax dodgers, including a former media magnate and a prominent entertainer, with the worst offender owing the state nearly euro1 billion ($1.3 billion), the Associated Press reported. But much of that money might never be reclaimed, as some of the top offenders are in prison or their companies are bankrupt.

Euro zone finance ministers will decide on Monday what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens after negotiators for private creditors said they could not improve their offer, Reuters reported. Resolving the issue of a Greek debt swap is key to putting Athens' debt on a sustainable path and avoiding a chaotic default that could threaten the whole currency bloc.

The Greek government and its private-sector creditors appeared to be closing in on a debt-restructuring deal on the basis of new proposals, raising hopes it would pave the way for another multibillion-euro bailout for the country, The Wall Street Journal reported. That optimism helped fuel a rally in financial markets across Europe, with the Athens stock exchange rising 2.9% and Greek banking stocks gaining 5%. Greece's efforts to get relief from its private-sector creditors recently have faltered.

Greece is due to continue on Thursday talks with banking representatives aimed at agreeing a haircut for private investors holding Greek debt, Ekathimerini.com reported. Charles Dallara, head of the International Institute of Finance representing private creditors, and Greece's prime minister Lucas Papademos met on Wednesday to pick up discussions from where they had left off last week, when the two sides failed to agree on the interest rate Greece will offer on new bonds and a plan to enforce investor losses. No statements were made after Wednesday’s meeting.