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UPDATE 1-Euro zone decision on Greece unlikely on Nov 12 - EU source

Julien Toyer
Monday, 5 Nov 2012 | 4:01 PM ET

MEXICO CITY, Nov 5 (Reuters) - A deal to keep near-bankrupt Greece afloat by providing more bailout money is unlikely to be struck next week when euro zone finance ministers meet in Brussels, a senior EU official said on Monday.

The official, who was attending a meeting of G20 finance ministers in Mexico City, said the euro zone still had to find a formula to make Greek debt sustainable and that several countries, including Germany, had to discuss the matter with their parliaments.

Athens also needs to push through spending cuts and tax measures worth 13.5 billion euros ($17.5 billion) as well as a raft of economic reforms that will satisfy EU and IMF lenders but anger the Greek population.

A 48 hour strike against the austerity drive will start on Tuesday and on Wednesday the government faces a knife-edge parliamentary vote on labour reforms that its lenders insist are needed but which the smallest party in the coalition has vowed to oppose.

``The November 12 meeting will not be the final stage. We're not so much under the gun as it may seem,'' the official said, adding that Greece could meet its financial obligations without further financial assistance until the end of November or even early December.

Until now, next Monday's Eurogroup meeting had been pencilled in as a likely venue to sign off on a new Greek programme.

``A deal is still likely in November, but not necessarily on November 12,'' the official said. ``There will be no deal until there is a deal on all the different strings of the package. We will not disburse the next tranche until all details are in place''.

A second European official told Reuters the threat of Greece missing the repayment of a 5 billion euro treasury bill falling due on Nov. 16 had been exaggerated.

Last week, a German government official said the troika of international lenders still had many open questions to resolve before reaching an agreement on payment of the next tranche of aid to the country.

The bulk of the new aid tranche, some 25 billion euros, is earmarked to recapitalise Greece's struggling banks and kick-start moribund lending.