Greece Sees Deal With Lenders: Official

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Greece expects to reach agreement with its foreign lenders by Monday's Eurogroup meeting on all issues except public sector reforms, a finance ministry official said on Wednesday.

The official, who spoke on condition of anonymity, sought to play down fears on what would happen if Greece did not receive aid payments in time, saying in a "worst-case scenario" it could compensate by issuing additional treasury bills.

"It won't be the end of the world," the official said.

"In the worst case scenario we will have to increase the issuance of T-bills, we will delay repaying arrears and it could lead to further cuts to payments."

Athens has missed a June deadline to place 12,500 state workers into a so-called "mobility scheme", under which they are transferred or dismissed within a year.

A senior finance ministry official said Greece could not meet its lenders demands on the scheme as they stand now.

On Tuesday afternoon, German Chancellor Angela Merkel was quoted as saying international lenders gave the indebted country three days to deliver on conditions to its international bailout.

"Greece has made progress thanks to the very reform-oriented government by (Prime Minister Antonis) Samaras," she told Sueddeutsche Zeitung in a group interview with other European papers. "I expect that debt sustainability will continue to be a given."

Asked whether owners of Greek debt might be forced to accept additional losses on their holdings through a so-called"haircut", Merkel said: "I don't see that."