(ATHENS) - Eurozone finance ministers are to meet Monday in Brussels and might approve a financial bailout package for Greece that would involve contributions from the European Union and International Monetary Fund.

The overall rescue framework for Greece also involves a major, unprecedented write-down of debt held by private banks and financial institutions.

Here are the main issues at stake:

- WHAT THE TALKS COVER

The unprecedented PSI (Private Sector Involvement) talks are classic debt restructuring negotiations, under which private creditors should accept a cut of at least 50 percent on the 200 billion euros ($260 billion) in Greek debt they hold and considerably longer repayment schedules.

Greece's debt totals some 350 billion euros.

For the first time however, a eurozone member is concerned and the talks are taking place to prevent Greece, which is on the brink of bankruptcy, from having to declare a debt default.

A Greek sovereign default could raise market pressure on countries like Portugal and possibly larger economies like Italy, Spain and even France, and increase the chances of a prolonged recession in the 17-nation eurozone.

That in turn could well undermine the global economy.

As a result, many countries around the world and the International Monetary Fund (IMF) have a keen interest in the crisis being resolved.

- WHY HAVE THE TALKS DRAGGED ON ?

Banks, insurers and private investors wanted to stick to an EU October summit deal that called for a 50-percent debt writedown (a 100-euro bond to be replaced by a 50-euro bond), with additional debt relief coming via the interest rate to be paid on the replacement bonds, which are to be repaid at considerably later dates.

Germany and the IMF insisted meanwhile that Greece's overall debt burden be reduced to 120 percent of gross domestic product in 2020 from the current 160 percent to ensure that it is sustainable over the longer term.

Italy's debt is currently worth around 120 percent of its GDP.

The success of a Greek accord with private creditors is tied to wider talks on the conditions of a second bailout of 130 billion euros that the eurozone pledged in October.

Greece has already benefitted from a 110-billion-euro rescue approved in May 2010 by the EU and the IMF.

Greece has had to accept stringent austerity measures, along with reforms aimed at getting its recession stuck economy back on track.

Greek political parties argued until the last minute over replacing extra pension cuts with cuts elsewhere in the budget but finally made the sums add up.

The EU is now considering opening an escrow account for Greece, which would block a portion of state revenues to guarantee repayment of bailout loans, a top EU official said Thursday.

EU economic affairs commissioner Olli Rehn said the suggestion was "one possibility for reinforcing surveillance and effectively implementing the programme."

- THE INTERNATIONAL STAKES IN THE NEGOTIATIONS

In the short term, the aim is to avoid bankruptcy by a eurozone member that could set off an unpredictable chain of events across the bloc.

Because the single currency is Europe's biggest project to date, a eurozone failure could have wider repercussions across the 27-member EU, one of the world's biggest economic regions.

In the absence of an accord, Greece could default from March 20, when it has to repay 14.5 billion euros to creditors.

If talks failed at the eurozone level, Athens might be forced to leave the bloc to be able to devalue its currency and loosen the debt stranglehold.

- WHAT ARE THE RISKS FOR GREECE ?

Under the terms of an expected deal with the EU and IMF, Greece will suffer in social terms given the efforts required, which include cuts in public sector salaries and pensions.

If Greece defaults or has to leave the eurozone, analysts warn that its borrowing costs would soar, making it even more difficult to straighten out its finances.

Most economists calculate the ultimate cost of such a scenario as much higher than that of the debt rescheduling agreements now under discussion.

- WHERE DOES THE ECB FIT IN ?

The European Central Bank has faced calls to write off some of the value of its own Greek bonds to help finalise a debt deal.

According to one eurozone central bank official, the ECB holds 45 billion euros in Greek bonds.

On Friday, sources told AFP the ECB had embarked on a debt swap programme in what could mark a crucial step towards a much wider deal.

But the central bank must take care not to create a situation that would generate lawsuits from private creditors contesting ECB moves to exempt itself from losses.

German central bank chief Jens Weidmann is also worried that investors could lose confidence in the eurozone, as similar debates might arise concerning bonds issued by countries like Portugal, worsening the crisis, a source said.

- WHY IS THE IMF PRESSURING THE ECB ?

The IMF has had trouble getting non-European shareholders to back a second debt bailout for to Greece, and the Fund's statutes prevent it from helping a country whose debt is unsustainable.

If the ECB balks and PSI does not reduce Greece's debt enough, the Fund has threatened to cut loans to Greece.

- AND IF ALL GOES WELL

Now that Greek political parties have agreed to swallow the latest radical austerity measures, a PSI accord is expected to be signed.

Before March 20, half of the debt held by private creditors should be erased and the first payments of some 85 billion euros in new European loans be made to meet the debt default deadline.

Up to 2015: continued austerity in Greece, which must still reform its economy if it is to compete successfully on a global level.

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Anatomy of the Greek debt negotiations