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EU to Hold Full Summit on Greek Debt Crisis


Greek Prime Minister Alexis Tsipras, center, speaks during a round table meeting at an emergency summit of eurozone heads of state and government at the EU Council building in Brussels, Belgium, July 7, 2015.

Greece appears to have one last chance to put together an economic reform plan before a full 28-nation European Union summit Sunday.

In announcing what he called a "decisive" summit, Italian Prime Minster Matteo Renzi told reporters Tuesday, "The ball is in Greece's court. Next Sunday, the final meeting will take place on Greece."

Leaders at an emergency eurozone summit in Brussels Tuesday were both angry and unimpressed with Greek Prime Minister Alexis Tsipras, who said Greece had made "improvements" in its request for more bailout money, but had nothing in writing.

An impatient Lithuanian President Dalia Grybauskaite said, "There was a promise for today. Then, they're promising for tomorrow. For the Greek government, it's every time 'manana' [the Spanish word for tomorrow]."

The White House said President Barack Obama spoke to Tsipras by telephone Tuesday. He repeated his belief that it is in everyone's interest for Greece and its creditors to reach a mutually acceptable deal.

Dutch Prime Minister Mark Rutte said, "I'm extremely somber about this summit. I'm also somber about the question of whether Greece really wants to come up with proposals, with a solution."

Crucial moment

Greece is facing a critical moment. After defaulting on a $1.8 billion debt payment to the International Monetary Fund last week, Athens faces another key deadline, a $3.8 billion payment due July 20 to the European Central Bank.

Greece has been trying to persuade its 18 neighbors in the eurozone to cut Athens' massive debt and hand it more bailout loans to keep the country from running out of cash and possibly becoming the first country to exit the eurozone in its 16-year history.

Meanwhile, many Greek banks are closed and withdrawals at cash machines are limited to just $67 a day. Store shelves are rapidly emptying and gas stations drying up with no one knowing exactly what is going to happen next.

If Greece and the EU cannot come to terms, Greece could be forced out of the eurozone and return to its old currency, the drachma — money that some outside Greece could refuse to accept.

Newly appointed Greek Finance Minister Euclid Tsakalotos (R) is welcomed by Eurogroup President Jeroen Dijsselbloem (L) at a euro zone finance ministers meeting on the situation in Greece in Brussels, Belgium, July 7, 2015.
Newly appointed Greek Finance Minister Euclid Tsakalotos (R) is welcomed by Eurogroup President Jeroen Dijsselbloem (L) at a euro zone finance ministers meeting on the situation in Greece in Brussels, Belgium, July 7, 2015.

Athens has amassed $350 billion of debt over five years, but Tsipras' call to write off about $100 billion of that was rebuffed even as European officials arrived for the summit.

"No, we are not willing to ease Greece's debt," said Finnish Finance Minister Alexander Stubb. "We did that already in 2011. We did that also in 2012."

Slovakian Finance Minister Peter Kazimir said, "Personally, I am skeptical a deal will be found."

Several European leaders said they were willing to negotiate further with Tsipras in the aftermath of Sunday's resounding Greek vote against the demands of international lenders to impose more austerity measures in exchange for more bailout money.

Officials, however, have bluntly told Tsipras that he needs to present a credible plan to reverse the fast-deteriorating Greek economy, which has left a quarter of its workers unemployed.

Sources of Greek Debt
Sources of Greek Debt

Mounting pressure

Pressure mounted Monday on Athens as the European Central Bank decided not to boost emergency credit to Greek banks. Without outside help, those banks were expected to run out of cash as early as Wednesday, with Athens projected to default on billions of dollars in loan repayments to European creditors later this month.

German Chancellor Angela Merkel, speaking Monday in Paris alongside French President Francois Hollande, said the conditions for a new Greek bailout package "have not been met." She placed the onus on Greek leaders to act quickly to strike a deal with creditors in order to stay in the eurozone.

"Time is of the essence and we insist that Greek proposals must be on the table this week, so we can deal with the situation the way it is at the moment," Merkel said.

Also Monday, in a sign seen by some analysts as conciliatory, Greece's outspoken finance minister, Yanis Varoufakis, resigned after repeated clashes with international lenders over bailout terms. Most recently, he accused the EU leaders of "terrorism" in their push to persuade Greek voters to approve more austerity measures.

In explaining his departure, Varoufakis said he was "made aware of a certain preference" by some members of the eurozone for his "absence" from meetings of finance ministers. He also said it was "an idea the prime minister judged to be potentially helpful to him in reaching an agreement" with Greece's creditors.

Tsipras later named lead bailout negotiator Euclid Tsakalotos as Greece's new finance minister.

Some information for this report came from Reuters.