Eurozone gives Greece until July 12 to submit new bailout proposal

Frustrated and angry European leaders gave Greek Prime Minister Alexis Tsipras a last-minute chance Tuesday to come up with what they view as viable proposals on how to keep his country in the eurozone.

Overcoming their surprise when Tsipras failed to present them with a detailed plan, the leaders agreed to what is supposed to be a final summit Sunday, saying that could give both sides an opportunity to stave off collapse of the struggling but defiant member nation.

Underscoring the gravity of the challenge, European Union President Donald Tusk decided to call all 28 EU leaders to Brussels instead of only the 19 eurozone members, because, for the bloc, it "is maybe the most critical moment in our history."

Tsipras arrived to Tuesday’s meeting buoyed by a triumph in last Sunday's referendum, where an overwhelming majority of Greeks backed his call to reject the belt-tightening reforms that creditors had last proposed.

But that domestic victory did not appear to give him much leverage in talks with foreign creditors, who know Tsipras needs a deal soon to keep his country afloat. Banks have been shut since last week and will not reopen before Thursday, cash withdrawals have been limited for just as long, and daily business throughout the country has come to a near standstill.

Still, many European leaders were not optimistic about the weekend talks.

"I'm extremely somber about this summit. I'm also somber about the question of whether Greece really wants to come up with proposals, with a solution," Dutch Prime Minister Mark Rutte said.

Greece's eurozone partners have steadfastly said they want to help Greece stay in the currency club but have just as often complained about Greece dragging its feet during months of negotiations. For its part, the Greek government under Tsipras has consistently said it was willing to undertake structural reforms desired by European lenders but would not continue a bailout process that it and many Greeks blame for the country's bleak economic picture. Five years after the first European bailout, Greek unemployment stands at 26 percent, the highest in Europe.

But European leaders were unmoved.

"At a certain point, you need to get to the truth," said Belgian Prime Minister Charles Michel, before asking: "Is there, yes or no, a political will of the Greek government?"

A Greek government official, who asked not to be named because of the sensitive nature of the discussions, said Tsipras was presenting a "common ground" to the 18 other leaders Tuesday, while a detailed proposal would come Wednesday.

He said the Greek government would submit a request for immediate financing in advance of $5.5 billion in loans due for repayment by the end of the month. He predicted a full political deal could be reached in two or three weeks.

German Chancellor Angela Merkel warned Tsipras he was dancing close to the financial abyss.

"We are no longer talking about weeks but very few days," she said.

In his flurry of contacts, Tsipras spoke by phone with President Barack Obama, and the White House said it was in Europe's interest to reach a resolution that puts Greece on the path toward economic growth and stability.

One big sticking point in the talks is Greece's demand that the terms of its bailout loans be made easier, including the form of debt relief.

European officials are split on the issue, with lead eurozone lender Germany still reluctant. The International Monetary Fund called last week for European states to accept longer repayment periods and lower interest rates on their loans to Greece. Many economists say that Greece's debt burden, at almost 180 percent of annual GDP, is unsustainable for a country its size.

Getting a new rescue deal for Greece is urgent and becoming more so by the day. Greek banks are running out of cash even after the government shut them last week and placed limits on how much depositors can withdraw or transfer.