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[BRUSSELS] European leaders gave debt-stricken Greece a final deadline of Sunday to reach a new bailout deal and avoid crashing out of the euro, after Greek voters rejected international creditors' plans in a weekend referendum.
In the first step of its renewed bid for funding, Greece's leftist government must submit detailed reform plans by Thursday, EU President Donald Tusk said after eurozone leaders held an emergency summit with Greek Prime Minister Alexis Tsipras.
All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will either save Greece's moribund economy or leave it to its fate.
"Tonight I have to say loud and clear - the final deadline ends this week," Mr Tusk told a news conference.
"Inability to find an agreement may lead to bankruptcy of Greece and insolvency of its banking system," he added.
European Commission President Jean-Claude Juncker warned "we have a Grexit scenario prepared in detail" if Greece failed to reach a deal, although he insisted he wanted Athens to stay in the euro club.
German Chancellor Angela Merkel meanwhile warned Greece would need a debt programme lasting "several years" and insisted writing off any of Greece's 320-billion-euro (S$477 billion) debt mountain was out of the question.
The deadline came after Mr Tsipras and his new finance minister Euclid Tsakalotos came to Brussels to discuss the fall-out from the dramatic referendum.
Greeks voted by 61 per cent to reject creditor demands for more austerity in return for fresh EU-IMF bailout funds.
GREECE TO MAKE 'EFFORTS'
Mr Tsipras, the young premier who has inspired leftist movements across the continent, said Greece was ready to make "efforts" to reach a "viable" deal that would guarantee an end to the debt crisis.
The 40-year-old Greek PM is also due to address the European Parliament in Strasbourg on Wednesday where he may set out further details of Greece's plans.
The referendum result was a political victory for radical leader Tsipras, who came to power in January on the back of vows to end five years of bailout-imposed auserity blamed for crashing the Greek economy, which has shrunk by a quarter since the crisis started.
But it infuriated other leaders and dealt a traumatic blow to the post-war vision of European integration, of which the single currency is a key part.
In Athens, the Greek government said it had committed to seeking its third bailout since 2010, with a revised request "taking into account" the concerns of creditors who have demanded more cuts to pensions and bigger taxes.
After his debut appearance in Brussels, Mr Tsakalotos told reporters that fellow eurozone nations had shown "political will" and there had been "progress" at the talks to help the country reach a bailout deal.
Mr Tsakalotos has replaced his outspoken motorbike-riding predecessor Yanis Varoufakis, who resigned on Monday in a bid to ease the rift with Athens's creditors.
Anxiety is building over the possibility that Greece could be forced out of the eurozone - a seismic shock not only for Europe but also for the world economy.
US President Barack Obama spoke by telephone to both Dr Merkel and Mr Tsipras before Tuesday's summit, reflecting the concern.
GRIM IN GREECE
The situation remained dire in Greece, where liquidity-starved banks are unable to open until Thursday at the earliest.
Athenians awoke yet again on Tuesday to the bleak reality of closed banks and more lines at cash machines for their daily withdrawal limit of 60 euros, amid dread the ATMs could soon be running empty.
The ECB, which has been keeping Greek lenders afloat, said Monday it had decided to maintain emergency funding to Greek banks - so-called Emergency Liquidity Assistance (ELA) - at its current level of 89 billion euros.
But it said Greece had to provide more collateral, a move that will make it more difficult to access the vital funds in the future, and it will be waiting for the results of the summit to see whether further steps are necessary.
Greece on June 30 became the first advanced economy to default on an International Monetary Fund loan, on the same day its EU-IMF bailout expired, and on July 20 it faces a huge payment of more than three billion euros to the ECB.
Read more on the Greek crisis here