Greece debt crisis: EU leaders step up efforts for deal Published duration 22 June 2015 Related Topics Greece debt crisis

image copyright Reuters image caption Thousands have rallied in Athens in support of the Greek government's anti-austerity stance

European leaders have intensified their efforts to reach a deal over the Greek debt crisis, ahead of an emergency Brussels summit to break the deadlock.

French President Francois Hollande has warned that "everything must be done" to keep Greece in the eurozone.

Greek PM Alexis Tsipras set out new proposals in a bid to prevent a default on a €1.6bn (£1.1bn) IMF loan.

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, with the European Commission, the IMF and the European Central Bank (ECB) unwilling to unlock the final €7.2bn tranche of bailout funds until Greece agrees to economic reforms they want to see introduced.

The head of the European Commission president's cabinet, Martin Selmayr, said on Twitter that Greece's latest proposal had been received by the country's creditors.

He said it represented a "good basis for progress" before comparing the discussions on a deal to a forceps delivery childbirth.

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.

They are angered by austerity measures imposed by Greece's lenders in the two previous bailouts, which saw wages and pensions slashed and left one in four Greeks unemployed.

Rallies were also staged in Brussels and Amsterdam in solidarity with the people of Greece.

'Mutually beneficial'

Prime Minister Tsipras is scheduled to meet the heads of Greece's three international creditors on Monday, ahead of his meeting with the leaders of 18 other eurozone nations in Brussels on Monday.

On Sunday, he made a new offer on a reforms package to the leaders of Germany, France and the European Commission, in what some see as a sign of the Greek government's willingness 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.

Italian Prime Minister Matteo Renzi has urged both sides to seize a "window of opportunity".

image copyright Reuters image caption The Greek PM has a busy schedule ahead of him on Monday as the eleventh hour of talks is reached

The head of Greece's biggest bank, Louka Katseli, earlier said it would be "insane" not to reach an agreement in Brussels on Monday.

The National Bank of Greece chief said while the banks were not under immediate threat of running out of money, the situation was serious and without a deal would become severe.

However, she said she thought it unlikely that Greece would be forced to leave the eurozone, saying the cost would be too high for other eurozone nations.

media caption Greece's debt dilemma explained in 75 seconds

Meanwhile the ECB is reportedly due to hold a separate meeting on Monday to decide on whether to raise the level of emergency funding for Greek banks, after it approved an emergency loan on Friday.

It comes amid reports of Greek savers withdrawing billions of euros in recent days, putting Greece's banking system under intense pressure.

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

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 are expected to open 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.

image copyright Reuters

What's happening on Monday?

The emergency summit of the leaders of 19 EU leaders was agreed late last week.

Even before the meeting takes place, Greece's three creditors need to come to some sort of deal with Athens.

That would act as a springboard for more intense discussions at the summit on Monday. So, needless to say, if Greece and the creditors do not strike a deal, there will not be much to talk about.

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.

On top of that, a separate European Council summit is scheduled for Thursday and Friday, and its agenda is packed. That meeting will take up a lot of the time of those who would need to be on hand to discuss Greece.