A key component of the package, which was agreed last October, is that Greece has to persuade its private creditors like banks and investment firms to take a steep hit on the value of their holdings of Greek debt. Greece has the highest debt burden relative to the size of its economy in the whole of the 17-nation eurozone and the writedown will help get it down to more manageable, though still high, levels.
Spokesman Pantelis Kapsis said that negotiations in the next three or four months with international debt monitors will "determine everything," including whether Greece escapes a disastrous bankruptcy.
Greece is being kept afloat by a first, €110 billion ($142 billion) international bailout agreed in May 2010, after investors shocked by the country's huge budget deficit and debt mountain demanded sky-high interest rates to continue buying Greek bonds.
An additional rescue package was agreed in October, after it became clear that the first batch of funds would not suffice, but that deal has yet to be finalized.
Sorting out the details of the bailout is the main task of the coalition government headed by former central banker Lucas Papademos, whose short mandate is expected to expire in early April.
"This famous loan agreement must be signed, otherwise we are outside the markets, out of the euro and things will become much worse," Kapsis told private Skai TV.
In return for its first batch of rescue loans from its European partners and the International Monetary Fund, Greece had to adopt deeply resented austerity measures to contain its budget deficit — set to hit at least 9 per cent of GDP for 2011 despite repeated spending cuts and tax hikes.
Kapsis said further cutbacks, possibly including new taxes, might be required to address a revenue shortfall,
"We will see what the shortfall is and it is very likely that measures will be required," he said. "I also don't believe it is easy to impose new taxes, but what does cutting spending mean? To close down the public sector?"
"There is no easy solution," Kapsis said.
Getting final approval of the new €130 billion bailout has been delayed because talks with Greece's private creditors over a massive bond swap, designed to cut Greece's debt by some €100 billion, have dragged.
While representatives of banks and insurance funds that hold a lot of Greek debt tentatively agreed in October to cut the face value of their holdings of Greek bonds by 50 per cent, they have so far failed to agree on crucial details of the deal.
Those include how much interest Greece has to pay for the lower-value bonds and when they have to be repaid — aspects that are key to determining how much of a relief the debt restructuring will actually bring to the cash-strapped country.
Athens and the negotiators for the private-sector missed a self-set end-of-year deadline, with talks carrying on over the holidays. The idea is that bondholders will voluntarily agree to forgive Greece some of its debts so that it can get its economy back on track and eventually repay its remaining obligations. A hard default would likely see investors lose much more of their money.
The hope is that following the writedown Greece's debt burden will be able to stabilize around 120 per cent of economic output by the end of the decade from around 160 per cent at present.
All sides are under pressure to reach a deal quickly, since Greece has to repay a €14.4 billion bond at the end of March. Without new money from the eurozone and the IMF Greece won't be able to make that payment. A successful restructuring would cut and delay the €14.4 billion payment.
Gabriele Steinhauser in Brussels contributed to this story.Suggest a correction