Greece has taken a step back from the financial abyss, presenting new reform proposals that Eurozone finance ministers cautiously welcomed as a possible basis for an agreement to avert a looming default.
Photo: French president Francois Hollande (left), Greek prime minister Alexis Tsipras and Spanish prime minister Mariano Rajoy attend the euro zone emergency summit. (Reuters: Yves Herman)
European stock markets and Greek assets leapt on hopes of a last-minute deal to ease a crisis that is threatening to drive Greece out of the Eurozone and undermine the foundations of the European Union's single currency.
Leaders of the 19 nations that share the euro arrived for an emergency evening summit in Brussels voicing guarded optimism that the Greek proposals, including higher taxes and moves to curtail early retirement, could lead to a deal this week.
Cash-starved Greece must repay 1.6 billion euros to the International Monetary Fund (IMF) by June 30 or be declared in default, potentially triggering a bank run and capital controls.
Jeroen Dijsselbloem, chairman of the group of 19 Eurozone finance ministers, described the new Greek document as comprehensive and "a basis to really restart the talks" but said talks in the next days would show whether the numbers added up.
"We will work very hard in the next few days — the [lending] institutions with the Greek government — to get that deal this week," he said.
European Council president Donald Tusk, who called the summit to try to break the deadlock, said there had been promising developments and leaders should show the way forward to avoid a worst-case "uncontrollable chaotic Grexit" while letting experts thrash out the details.
He called for an end to the "blame game" between Athens' young left-wing Syriza government, which has triggered the crisis by scrapping the austerity measures that were a condition of Greece's bailouts, and its creditors, led by Germany, which refuse to keep funding Greece without being sure that its public finances are sustainable.
Mixed reaction from leaders
German chancellor Angela Merkel, facing strong public resistance to any further aid, was more cautious than Mr Tusk on arrival at the summit.
"After the meeting there is no basis for a decision, so this can only be an advisory summit," she said.
Her finance minister, Wolfgang Schaeuble, a hardliner on Greece, earlier said he had seen nothing new from Athens.
I hope the work conducted in the past few days by Greece and the institutions lays the foundation for an agreement that should be reached as soon as possible ... There are improvements, even if not everything has been resolved.
French president Francois Hollande
But other leaders sounded more upbeat.
"I hope the work conducted in the past few days by Greece and the institutions lays the foundation for an agreement that should be reached as soon as possible ... there are improvements, even if not everything has been resolved," French president Francois Hollande said.
US Treasury secretary Jack Lew urged Greek prime minister Alexis Tsipras to make a "serious move" at reaching a deal with its creditors to avert "immediate hardship for Greece and uncertainties for Europe and the global economy".
Mr Dijsselbloem made clear that Greece's last-minute submission of its proposals meant the finance ministers could not make any decision until Greece thrashed out details in the next few days with its international creditors: the European Commission, the European Central Bank (ECB) and the IMF.
With anxious savers continuing to withdraw cash, though apparently in smaller amounts on Monday than last week, the ECB increased its emergency liquidity assistance to Greek banks for the third time in a week.
'We do the greatest harm to Europe'
In its proposal, Greece offered to raise the retirement age gradually to 67 and curb early retirement.
It also offered to reform the value-added-tax system to set the main rate at 23 per cent. And it promised additional taxes on business and the wealthy.
Economics minister George Stathakis told the BBC that Athens had avoided crossing "red lines" set by Syriza, since it would not cut pensions or wages or raise the VAT rate on electricity.
But in an example of the anger that Athens has caused in northern Europe, Hans-Peter Friedrich, deputy parliamentary floor leader for Merkel's conservatives, said there was no point in "dragging out a bankruptcy for political reasons".
"We do the greatest harm to Europe if we lie to ourselves," he said, adding that he was sceptical that the Greek government would provide adequate assurances to win German parliamentary support for further aid.
Mr Tsipras held a series of meetings with central figures including ECB president Mario Draghi and IMF head Christine Lagarde before the summit, but made no comment to reporters.
Greece's central bank chief warned lenders last week to brace for a "difficult day" on Tuesday if the summit ended without a breakthrough, banking sources said.
But there were no immediate long queues or signs of panic outside Greek banks in the capital on Monday.
"I believe there will be a deal today. This is a normal visit to the bank," one Greek saver said outside a bank branch.
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