Eurozone to Review Last-Minute Rescue Plan for Greece

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Pro-Euro protestors hold Greek national flags during a pro-Euro rally in front of the parliament building, in Athens, Greece, June 30, 2015. Greek Prime Minister Alexis Tsipras won a commitment to seek a last-minute rescue at an emergency eurozone summit on Tuesday, before his country's banks run out of money. Yannis Behrakis/Reuters

Greek Prime Minister Alexis Tsipras won a commitment to seek a last-minute rescue at an emergency eurozone summit on Tuesday, before his country's banks run out of money.

EU leaders will hold a further summit on Sunday to approve a plan to aid Greece if creditor institutions are satisfied in the meantime with a Greek loan application and reform commitments.

"The ball is in Greece's court," Italian Prime Minister Matteo Renzi said. "Next Sunday the final meeting will take place on Greece ... I am not pessimistic."

German Chancellor Angela Merkel, who arrived saying there was still no basis for reopening negotiations with Athens, changed her tune in the room and was actively involved in efforts to find a last-ditch solution, eurozone sources said.

Merkel said she expected a formal loan request from Athens on Wednesday and more detail on how Greece would cooperate to make its economy more competitive on Thursday, in order to seek the approval of the German parliament to start negotiations.

"We all share responsibility for the euro," she said of the decision to invite all EU leaders on Sunday - a timetable she said reflected the danger of the situation and the urgent need for a solution.

Short-term finance could also be made available if the Greek government came up with satisfactory proposals and took "prior actions" in passing laws to convince creditors of its intent.

Austrian Chancellor Werner Faymann warned, however, that if there were no deal on Sunday, eurozone governments would have to prepare "Plan B"—code for Greece losing all access to euros and so finding itself excluded from the currency area.

With Greek banks down to their last few days of cash and the European Central Bank tightening the noose on their funding, Tsipras tried to convince the eurozone's other 18 leaders to authorize a new loan swiftly.

People familiar with Greece's financial system said the banks could start running out of money within two days unless there was an international rescue.

However, eurozone sources in Brussels said ECB President Mario Draghi had assured finance ministers that the central bank would keep Greek lenders afloat this week as long as negotiations were under way.

Merkel and French President Francois Hollande worked together on a plan to save Greece from plunging into economic turmoil and possibly having to ditch the euro. This involved a medium-term conditional program and a short-term interim financing deal for a few months, the sources said.

However, a solution still depends on Tsipras putting forward convincing reform proposals and rushing key measures through parliament by the weekend to make Greece's public finances sustainable.

If he does, bridge financing could be provided by "Greece's friends" and by releasing past ECB profits on Greek bonds, to prevent Athens from missing a crucial 3.5 billion euro bond redemption to the ECB on July 20, the sources said.

Some of Athens' 18 partners in Europe's common currency vented exasperation at five years of crisis wrangling with Greece. Lithuanian President Dalia Grybauskaite complained: "With the Greek government it is every time manana."

Merkel, under pressure in Germany to cut Greece loose, made clear it was up to Tsipras to present convincing proposals after Athens spurned tax rises, spending cuts and pension and labor reforms that were on the table before its 240 billion euro ($262.7 billion) bailout expired last week.

Eurozone finance ministers complained that their new Greek colleague Euclid Tsakalotos, while more courteous than his abrasive predecessor Yanis Varoufakis, had brought no new proposals to a preparatory meeting before the summit.

"I have the strong impression there were 18 ... ministers of finance who felt the urgency of the situation and there is one ... who doesn't feel the urgency of the situation," Belgian Finance Minister Johan Van Overtveldt said.

Greek officials said the leftist government broadly repeated a reform plan Tsipras sent to the eurozone last week before Greek voters, in a referendum on Sunday, overwhelmingly rejected the austerity terms previously on offer for a bailout.

Jeroen Dijsselbloem, chairman of the Eurogroup of currency zone finance ministers, said the ministers would hold a conference call on Wednesday to review a Greek request for a medium-term assistance program from the European Stability Mechanism bailout fund, due to be submitted within hours.

Tsipras met privately with the leaders of Germany and France, the currency area's main powers, and European Commission president Jean-Claude Juncker just before the summit began.