Athens, Greece (BBN)-Greece faces a critical 24 hours as European leaders gather for an emergency summit in Brussels that could break the deadlock around the country’s debt crisis.
On Sunday, Greek PM Alexis Tsipras set out new proposals to try to prevent a default on a €1.6bn (£1.1bn) IMF loan, reports BBC.
One European official said the proposals held plenty of promise.
Greece must repay the loan by the end of June or risk crashing out of the single currency and possibly the EU.
Talks have been in deadlock for five months. The European Commission, the IMF and the European Central Bank (ECB) are unwilling to unlock the final €7.2bn tranche of bailout funds until Greece agrees to economic reforms.
The three creditors must agree to the deal offered by Greece to ensure Monday’s talks have a clear focus.
Prime Minister Tsipras is meeting the heads of Greece’s three international creditors at 11:00 (09:00 GMT), ahead of his talks with the leaders of 18 other eurozone nations.
Mr Tsipras’ offer on Sunday of a reforms package to the leaders of Germany, France and the European Commission is seen by some as a sign the Greek government is willing to make concessions.
The proposals, which Mr Tsipras described as “mutually beneficial”, were adopted at an emergency meeting of the Greek cabinet – though they have yet to be revealed.
The ECB will also hold a separate meeting on Monday to decide whether to raise the level of emergency funding for Greek banks, after it approved an emergency loan on Friday.
Greek savers have withdrawn billions of euros in recent days, putting Greece’s banking system under intense pressure.
Thousands of demonstrators gathered in Athens on Sunday evening in support of its left-wing government, which came to power off the back of an anti-austerity promise.
WHY ALL THE FOCUS ON MONDAY?
The deadline for Greece to pay back a slice of its loan is 30 June – so why the panic to get things resolved by 22 June?
The simple answer is time.
Just agreeing a deal and arranging how the money is transferred is a complicated affair – one that could not be finalised with hours to go.
A separate European Council summit is scheduled for Thursday and Friday, and its agenda is packed.
In theory, if no deal is struck on Monday, there is still a week to get things resolved.
WHAT’S BEHIND THE CRISIS?
Withdrawals between last Monday and Friday reportedly reached about €4.2bn, representing about 3% of household and corporate deposits held by Greek banks at the end of April.
But Greek banks opened as normal on Monday following the ECB loan.
Greece’s lenders want to see Athens implement a series of economic changes in areas such as pensions, VAT and on the budget surplus before releasing the funds, which have been delayed since February.
GREECE – DEAL OR NO DEAL?
OPTION 1: No deal: Greece defaults on IMF and ECB repayments; ECB pulls plug on emergency bank assistance leading to run on Greek banks, capital controls and potential Grexit
OPTION 2: Greece agrees reform deal with creditors at last minute and avoids default, staying in euro
OPTION 3: No deal reached but both sides paper over cracks and Greece stays in euro for now