Greece, a disaster in the making — Mercury News editorial

After the eurogroup meeting Mr Tsipras met Ms Merkel, French President Francois Holland and president of the Commission Jean Claude Juncker and this appeared to set the tone for the summit.

“Time is of the essence”, Merkel said afterward. “I can’t imagine the proposal would be less serious than the proposal that was already on the table”.

In Sunday’s referendum, Greeks voted by 61.31 per cent to 38.69 per cent to reject austerity terms in exchange for releasing more funds under an global bailout package.

Jeroen Dijsselbloem, the president of the Eurogroup, a grouping of finance ministers from the 19 countries in Europe’s common currency union, told reporters after the latest crisis meeting ended without any decisions, “There were no new proposals at this point from the Greek minister”. He will be tested as soon as Tuesday, in Brussels.

“I don’t know if you will have the chance to do the same but I have to do that today”.

Finance ministers from Finland and Slovakia made clear that canceling more Greek debt – following a similar exercise in 2012 – was unacceptable.

Greek banks are running out of cash even after the government placed limits on how much depositors can withdraw.

The European Central Bank says in a statement that the credit “can only be provided against sufficient collateral”.

Paris and Berlin remain divided despite the Merkel-Hollande display of unity, with Germany’s Economy Minister Sigmar Gabriel insisting that talks on reducing Greece’s debt were impossible before Athens implements reforms.

“The Greek people proved they were not afraid and are not looking out just for themselves”. Though the banks have enough cash to muddle through the next several days, the uncertainty has caused panic for businesses, pensioners and ordinary citizens.

“I think that Varoufakis resigning is a nice gesture but fundamentally it doesn’t change a whole lot”. There is urgency for Greece.

The eurozone has given Greece until Thursday to present new proposals to secure a deal with creditors, and has called a full European Union summit for Sunday.

The ongoing Greek drama hurt stocks around the world, particularly in Europe.

Greece has been granted two bailout programs worth a total of 240 billion euros ($266 billion) in loans from other eurozone countries and the global Monetary Fund. But the spending cuts and tax increases demanded as a condition for the loans have hit growth, causing an economic depression and pushing unemployment to 25 percent.

Greek voters have overwhelmingly turned down the terms of an worldwide bailout in a historic rejection of austerity.

The Greek government said in Athens earlier it would present Wednesday a “common ground document” for a debt deal that would “take into account” the concerns of worldwide creditors.

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.

“The negotiations can keep going until July 20”, said Mark McFarland, Hong Kong-based chief economist at Coutts & Co, referring to the deadline for Greece to pay €3.5 billion back to the European Central Bank.

MARTIN CUDDIHY: The next 24 hours are crucial.