Greece awaits eurozone bailout decision

The eurozone turned the screw after finance ministers finished two days of intense talks on Greece’s reform proposals drawn up to satisfy its global creditors – the EU, the European Central Bank and the global Monetary Fund.

In a warning that the Greeks may not get the deal they need, German chancellor Angela Merkel, a key player in the negotiations, said there would “not be an agreement at all costs”. The leaders are due to meet later.

– By Menelaos Hadjicostis in Brussels.

He added if Greece left the bloc it it would create “a Europe that goes backwards and no longer advances”.

The gap has also widened between Hollande’s French Socialists and the Social Democratic Party of Germany, whose leader and German vice-chancellor Sigmar Gabriel has stepped up his criticism of Athens.

That was the message from European finance officials, after they kicked off a second day of frantic diplomacy Sunday on Greece’s request for a new rescue.

Italian Economy Minister Pier Carlo Padoan urged the Greek government to take steps as early as Monday to prove it would stick to its word.

The grim face of Alexis Tsipras’s face said it all.

After swaying a skeptical parliament to back a harsh austerity package to stave off financial collapse, the Greek government on Saturday faced an uphill task persuading its global creditors that it could be trusted to enact its reform promises in full.

“The deal needs to be ambitious at an economic level and realistic at a political level”, Moscovici said. The text still was still subject to amendment by the eurozone leaders, and numerous sections of the documents were bracketed for the leaders’ amendments. “There is great hesitation from the Greek side and now the heads of state and government have to choose”.

Speaking after Saturday’s gathering of finance ministers, Eurogroup president Jeroen Dijsselbloem admitted talks had been “very difficult”.

On Sunday, doubts on the Greek government’s commitment to implement tough measures continued.

The talks will resume at 11 a.m. local time (0900 GMT), just a few hours before the European Union’s 28 leaders are meant to descend on Brussels for a summit that has been billed over the past week as Greece’s last chance to convince creditors that it deserves more financial help. “It is not about closing a deal”.

The main obstacle to moving forward is a lack of trust.

Greece’s banks, according to many accounts, have barely enough cash in their vaults to see the country through the week.

In Greece, there is growing alarm at capital controls that have closed banks and rationed cash at ATMs for almost two weeks, leading to fears that food and medicine will soon run short. Although the country’s annual budget deficit has come down dramatically, Greece’s debt burden has increased as the economy has shrunk by a quarter.

Yet Greece needs funds now, its banks are in danger, and the country’s future in the eurozone remains on a knife-edge.

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But without agreement in principle to start talks on a bailout, the crisis in Greece will only deepen, dragging the country ever closer to exit from the euro.

However, Harris Georgiades warned that choices based on “populism, slogans and extremes” won’t lead to a deal. “And then, at that moment, all of Europe, the eurozone has to say that it will give its support”.

On one hand, northern Europeans see the Greek state as weak, corrupt and unable to deliver on promised reforms.

Finnish Finance Minister Alexander Stubb said he was still hopeful but that the euro zone was still “very far away” from getting the conditions it needed.

Terence Quick, a member of the rightwing Independent Greeks, the junior coalition partner in the government, said that any deputies who voted against the government should resign.

Greece has asked Europe’s bailout fund for a three-year 53.5 billion-euro ($59.5 billion) financial package but many officials in Brussels say the figure will have to be much higher and insist on tough Greek austerity measures.

The president said a strong majority in the European Parliament is determined to keep Greece in the eurozone.