(L-R) German Chancellor Angela Merkel, International Monetary Fund (IMF) Managing Director Christine Lagarde, European Commission President Jean-Claude Juncker, European Central Bank President Mario Draghi, French President Francois Hollande, Greek Prime Minister Alexis Tsipras and Spanish Prime Minister Mario Rajoy attend a Eurozone emergency summit on Greece in Brussels, Belgium, June 22, 2015 (Photo: Reuters)
Greece and its creditors were working to seal a bailout deal with exactly one week to go Tuesday before Athens must make a huge debt repayment or face default and a possible euro exit.
After an emergency summit in Brussels Monday, the leaders of the 19 eurozone countries ordered their finance ministers to hold fresh talks on Wednesday to thrash out the details ahead of a full meeting of all 28 EU member states on Thursday.
The European Union's commissioner for economic affairs expressed optimism Tuesday, saying he was "convinced" that Greece and its creditors would strike a deal on Athens' debt.
"I am convinced that we will reach an agreement," Pierre Moscovici told French radio after Greece submitted an 11th-hour reform plan to free up crucial funds from its EU-IMF bailout.
Moscovici warned however that "work remained to be done" on the question of value-added tax and pension reform -- key sticking points for the left-wing government in Athens.
The Greek government had a word of caution, noting that any accord would have to get approval of a majority in parliament.
"If the agreement is not approved by the deputies of the governmental majority, the government cannot remain in place," government spokesman Gabriel Sakellardis told Greek television Tuesday.
Greek Prime Minister Alexis Tsipras, who was elected on an anti-austerity platform, will have to convince his hard-left Syriza party to accept the concessions Athens has had to make to satisfy its creditors. Only one party member so far has come out publicly against the proposals.
But Sakellardis sounded a note of urgency.
"We have to have an agreement by the end of the week and we are very near one, the next 48 hours will be decisive," he said.
Greece is up against a deadline of June 30 to repay the International Monetary Fund around 1.5 billion euros ($1.7 billion).
Meanwhile growing fears of a bank run in Greece amid a huge outflow in deposits again prompted the European Central Bank on Tuesday to inject more emergency funding to cover withdrawals.
European stocks opened higher Tuesday after a huge rally on Monday saw record finishes on Wall Street and most Asian markets likewise climbed on the apparent progress in Greek debt talks.
German Chancellor Angela Merkel said Monday that while Greece's latest plans were a "good starting point for further talks", it was also clear that "absolutely intensive work is necessary now."
At the same time, Merkel ruled out any question of debt reduction, as Greece has demanded, and also said the leaders at the emergency eurozone summit had not discussed any possible extension of the Athens bailout.
The Greek proposals were a last-ditch bid to unlock the final 7.2-billion-euro tranche of its current bailout programme. If it fails to get the funds it will almost certainly fail to make the payment to the IMF.
Tsipras said Monday the "ball is now in the court of the European authorities," who have until now always insisted that it is up to Greece to make concessions.
The Greek premier has baulked at making more of the spending cuts that have led to five years of hardship for many Greeks, insisting that pensions and VAT hikes were red lines.
EU President Donald Tusk warned of the consequences of failure for the 19-country currency union, including the possibility Greece could crash out of the euro and maybe even the EU itself.
"The most important thing is that the leaders take full responsibility for the political process to avoid the worst case scenario, which means uncontrollable, chaotic
'Grexident'," Tusk said, using the term for a failure to prevent Greece leaving the euro.
Tusk confirmed that the new meeting of eurozone finance ministers would be held on Wednesday "so that the Eurogroup can achieve results... that can be presented Thursday morning" to EU leaders.
EU sources told AFP that Greece had now met 90 percent of the conditions set by its creditors.
One remaining sticking point was over Greece's proposals for VAT sales tax measures that would raise the equivalent of an extra 0.75 percent of Greece's gross domestic product, which the creditors say should be at 1.0 percent.
The creditors suggested Greece increase VAT on hotels and restaurants from 13 percent to 23 percent.
"Food is a basic necessity but not restaurants, which rely heavily on foreign tourists," a source told AFP.