Greek Prime Minister Alexis Tsipras looks at his watch as he delivers a speech during a parliamentary session in Athens, Greece June 28, 2015. REUTERS/Alkis Konstantinidis Greek prime minister Alexis Tsipras has just announced he has submitted proposals “aiming for a socially just and economically viable agreement” that will lead to a “final exit” from the nation’s debt crisis.

The proposals include credible reforms “in return for a commitment to adequate funding”, according to a report from Reuters.

About fifteen minutes before Tsipras made his announcement German Chancellor Angela Merkel seemed to pre-empt it, saying new proposals were needed and they would need “stronger measures to plug financing gap because of the economic deterioration.” That sounds like a difficult and high hurdle for the Greek prime minister.

She added there was “no question of a debt haircut for Greece” because it would be illegal under the EU Treaty.

There was dismay in markets and among the EU leadership at Tuesday’s summit after the Greek finance minister Euclid Tsakalotos failed to to bring fresh proposals to the Eurogroup meeting.

One thing all parties agree on is that time is running out – Greek banks have only days of cash left – and some sort of a deal needs to be agreed by the week’s end. That makes Sunday’s emergency summit which will be attended by all 28 members of the EU the single most important meeting of the crisis.

The situation remains fluid but Europe is preparing for Greece to exit the euro. Jean Claude Juncker hinted at this earlier when he said “we have a Grexit scenario, prepared in detail.”