WRAPUP 5-Greece sees rescue deal on Saturday,thousands protest

* Negotiations on loan package expected to close on Saturday

* France and Germany determined to implement 3-year plan

* Thousands protest against planned cuts on May Day

* Says EU needs to help with policy against speculators

(Adds Greek cabinet meeting brought forward, arrests)

By Lefteris Papadimas and Ingrid Melander

ATHENS, May 1 (BestGrowthStock) – Greece expects to conclude talks
with European Union and IMF officials on a multi-billion euro
financial bailout on Saturday, a government official said, while
thousands protested in Athens against planned state cutbacks.

French Economy Minister Christine Lagarde said she expected
a package of 100-120 billion euros ($133-$160 billion) to help
Greece out of its debt crisis, and had “good hopes” a deal could
be reached by the end of this weekend.

The fallout from the unexpectedly large budget deficit
revealed by Greece last year has exposed splits within the euro
zone over how to handle a crisis that has raised pressure on the
euro and borrowing costs for weaker EU economies.

Athens is negotiating with officials from the International
Monetary Fund, European Commission and European Central Bank,
but any deal must go to the Greek cabinet and EU governments.

“We expect to conclude the negotiations with the IMF, the EU
and the ECB today,” the Greek official told Reuters.

Prime Minister George Papandreou’s press office said a
cabinet meeting on Sunday would be held at 0630 GMT, slightly
earlier than first planned. It is to be broadcast live on Greek
television.

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Greek Crisis page Top News: http://r.reuters.com/hus75h
Euro zone crisis in graphics: http://r.reuters.com/fyw72j
Timeline: http://r.reuters.com/nyh29j
For a factbox on Greek budget waste [ID:nLDE63S0AX]
For assessment of deficit cut targets [ID:nLDE63T0NH]
For a full overview of stories on the crisis [ID:nLDE6351JT]
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In Paris, Lagarde’s comments came after French President
Nicolas Sarkozy held a meeting of French ministers on Saturday
to discuss Greece. His office said France and Germany were
determined to implement a three-year aid plan rapidly.

But a bailout will come in return for draconian budget cuts
in Greece, where thousands marched on May Day shouting slogans
against austerity measures they say only hurt the poor and will
drag the country further into recession.

“No to the IMF’s junta!,” protesters chanted, referring to
the military dictatorship which ruled Greece from 1967 to 1974.
“Hands off our rights! IMF and EU Commission out!,” the
protesters shouted as they marched to parliament.

Police fired teargas at a group of about 20 protesters who
were trying to reach parliament, a Reuters witness said. Police
said they arrested three protesters, while seven policemen were
slightly injured.

Greece’s public sector union has also called a 4-hour strike
for Tuesday, on top of a nationwide strike set for Wednesday,
highlighting the challenge the government faces in pushing
through the cuts it has promised potential lenders.

But Deputy Prime Minister Theodoros Pangalos said he was
confident the measures would be effectively implemented and
could prevent Athens from defaulting on its debt repayments.

“The austerity measures will be efficient enough to avert a
default,” Pangalos told Reuters on the sidelines of the opening
of the Shanghai World Expo.

“The demonstrations and strikes are normal in a democracy.
It is normal people are not happy. We will help by trying to
persuade the people, introducing new developments and
strategies,” he said.

GREEK CUTS

Athens plans to cut its budget deficit by 24 billion euros
($31.9 billion) to secure up to 120 billion euros in aid over
three years. Investors hope this will stop the Greek crisis from
sinking other fragile EU economies.

But the government faces a battle with unions, angry at the
scale of the cutbacks, and social unrest could spread.

More than half of Greeks say they will take to the streets
if the government agrees to new austerity measures, according to
an ALCO poll released on Friday by the newspaper Proto Thema.

Underscoring investors’ jitters over the potential for
public opposition to thwart the austerity programme, the euro
dipped after the poll was published.

European officials have blamed market speculators for
aggravating Greece’s woes, as bets on the likelihood it might
default on its debt have sharply driven up its borrowing costs.

European banks will contribute to Greece’s bailout, Germany
said on Friday, and that could make it easier for EU governments
to persuade taxpayers to rescue Greece from its debt crisis.

A senior banking source told Reuters that Deutsche Bank AG
Chief Executive Josef Ackermann, at the request of Germany’s
finance minister, was helping to coordinate efforts by the
German private sector to support the rescue package.

The consortium has already promised to contribute between 1
and 2 billion euros, which could involve buying Greek government
debt, but no formal agreement has been struck, the source said.

German Chancellor Angela Merkel, in an interview to be
published on Sunday in Bild am Sonntag newspaper, said she would
welcome a “voluntary participation from banks”.

If euro states fail to engineer a Greek bailout that calms
markets, they could end up footing a bill of half a trillion
euros ($650 billion) to save several nations, economists say.

Markets have worried that countries such as Portugal and
Spain, whose debt was downgraded by ratings agencies this week,
could be threatened unless they tackle their deficits swiftly.

The IMF believes it will take 10 years for Greece to
overcome its financial problems, according to a report to appear
in Monday’s Der Spiegel magazine. [nLDE640039]

However, European Commission President Jose Manuel Barroso,
also in Shanghai for the opening of the Expo, said on Friday in
Beijing that the Greek rescue package would prevent the crisis
from spilling over to other countries. “It is about safeguarding
the overall financial stability of the euro zone,” he said.

Investment Basics
(Additional reporting by Edmund Klamann in Shanghai; Writing by
Lin Noueihed; Editing by Charles Dick)

WRAPUP 5-Greece sees rescue deal on Saturday,thousands protest