Greek PM holds new bailout talks

He will hold talks with European Council President Herman Van Rompuy in Warsaw before travelling on to Paris to meet French President Nicolas Sarkozy.

International inspectors are in Athens deciding whether Greece should receive bailout funds of €8bn.

The talks have triggered angry protests on the streets of the Greek capital.

A BBC correspondent in Athens says Papandreou is on a charm offensive, trying to convince his European colleagues that Greece can meet the demands imposed upon it by a tough austerity programme.

The unpopular reforms are vital to guarantee international loans aimed at stopping the debt-ridden country from going bankrupt.

President Sarkozy said that after his meeting with Papandreou on Friday afternoon he would unveil a Franco-German strategy, but did not give any details.

Germany and France together represent about half of the 17-nation eurozone's economic output.

"It is very important that the Franco-German axis can make its voice heard about the concrete application of the decisions taken at the end of July [on a second rescue package for Greece]," Sarkozy said during a visit to Morocco.

"After seeing the Greek prime minister... I will have an opportunity to say exactly what our strategy is for supporting countries like Greece," he added.

Since eurozone leaders agreed on a second rescue package for Greece, Athens has fallen behind on its debt reduction targets, raising fears of a Greek default.

A vote in Germany's parliament on Thursday to back a more powerful bail out fund for eurozone economies was welcomed in Athens.

Sarkozy also congratulated German Chancellor Angela Merkel by telephone on Thursday, his office said, calling the vote a key step in stabilising the eurozone.

But the BBC reported some analysts believe the whole strategy for Greece, with a possible second bailout, needs urgent readjustment.

That is partly because contagion from Greece to other eurozone countries is no longer a threat but a dangerous reality.

Greek taxi drivers held angry protests outside Parliament on Thursday on the second day of their 48-hour strike.

The drivers are opposed to government reforms that would open their closed-shop profession.

Meanwhile, talks are continuing between the Greek government and inspectors from the "troika" of international creditors supporting Greece - the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).

Many Greeks believe that austerity measures are pushing the country's crippled economy deeper into recession and strangling any chance of growth.