Europe weighs new Greek debt proposals

Dijsselbloem described the Greek document as comprehensive and "a basis to really restart the talks" but said it remained to be seen whether the numbers added up to make Athens' public finances sustainable.

Greece has a debt repayment on June 30 worth 1.6 billion euros that it cannot afford without more loans. The talks are currently about releasing the last 7.2 billion euros in the country's bailout program. The country has been negotiating for four months what economic reforms it should make to get the money.

Ahead of the meetings, Greek Prime Minister Alexis Tsipras made new proposals on the economic reforms and budget cuts his country would accept. European Commission President Jean-Claude Juncker said they were signs of progress, but he warned that “we are not yet there.”

Meanwhile, Monday's talks gave a boost to stock markets. Athens shares, which had lost much of its strong gains on the news that there has been no definitive deal at a meeting on Monday, rebounded on the positive comments. It closed 9 percent higher. The Stoxx 50 index of top European shares was somewhat less volatile and closed 4.1 percent higher.

Despite the market rally, tension was palpable in Greece, where people flocked to cash machines to withdraw money. The concern is that a debt default by Greece could destabilize the country enough that it might have to eventually leave the euro.

To support Greek banks in the face of growing money withdrawals, the ECB on Monday increased the amount of emergency credit it allows the banks to draw on.

An exit from the euro would be hugely painful for Greeks, plunging the country back into a deep and long recession. Experts are more divided about its effects on Europe and the world economy. Some say it would be manageable, but others note there is huge uncertainty. Several European countries have said publicly they are getting prepared for such an eventuality.

Since coming to power in January, the leftist government in Athens has refused to embrace more budget austerity measures. European lenders have insisted upon the reforms as a condition for further loans, but many Greeks blame them for further handicapping the economy, currently the worst performing in Europe and with the highest unemployment rate at over 26 percent.

Over the past weeks, the creditors have often complained that Greek proposals on what kind of reforms they would implement have been too slow to come and far too vague.

German Finance Minister Wolfgang Schaeuble, who has taken a consistently hard line on Greek debt, said Monday that despite the new Greek plan, "there is nothing new beyond many trying to create expectations which are not supported by substance."

Greece's economy minister, Giorgios Stathakis, was upbeat, saying that Athens' latest offer effectively breaks the deadlock with international lenders.

"They have accepted that the new proposal of the Greek government is a proper framework on which to work," he told Britain's BBC.

Stathakis said the proposals included new taxes on business and the wealthy but no further cuts in pensions or public sector salaries, which was still a "red line" for Greece.

However, Athens will make tougher rules on early retirement and shift some categories of goods to a higher sales tax bracket, including hotels and certain foods. Emergency bailout taxes that had been imposed will remain, even though Tsipras had pledged to phase them out.

About 5,000 people attended a pro-government rally in central Athens Sunday night. Activists who are pressing the Tsipras government to acquiesce to European lender reform demands are slated to gather Monday evening outside the Greek Parliament.

Al Jazeera and wire services