Greece begins talks on EU-IMF loan

Greece is percariously close to defaulting as its borrowing costs are currently 8.0 per cent.

Investors are hoping that Greece will eventually agree to a 40-45 billion-euro aid package by the end of  the 10-day talks. Greek Finance Minister George Papaconstantinou said that discussions will revolve around a "three year programme of economic policies."

"The Greek government will decide on whether to ask the activation of the mechanism when it considers it is needed, and this will depend both on the borrowing conditions and the progress of the talks," he said.

Many details still need to be discussed, including precise terms, conditions and interest rates. Greece would need to ask for at least 10 billion euros by the end of May in order to pay bills and some pensions. It needs an additional 30 billion euros for the rest of the year to create structural reforms imposed by the EU and to levy massive cutbacks, especially in the public sector.