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Eurozone leaders to hold emergency summit on Greece
[BRUSSELS] Eurozone leaders will hold an emergency summit in Brussels on Tuesday to discuss the fallout from Greek voters' defiant "No" to further austerity measures, with the country's Prime Minister Alexis Tsipras set to unveil new proposals for talks.
As the country's economy gasps for air, with banks closed until at least Thursday on fears cash machines are running dry, Germany and France presented a united front, calling on Mr Tsipras to make "precise" proposals in a bid to revive bailout talks.
"The door is open to discussions," said French President Francois Hollande Monday after crisis talks in Paris with German Chancellor Angela Merkel, held a day after Greeks rejected creditors' proposed terms for a new bailout in a historic referendum that was a political victory for Mr Tsipras but plunged Europe into crisis.
"It is now up to the government of Alexis Tsipras to make serious, credible proposals so that this willingness to stay in the eurozone can translate into a lasting programme," Mr Hollande said.
For her part, Dr Merkel said the conditions for a new Greek rescue package "have not yet been met." "And that is why we are now waiting for very precise proposals from the Greek prime minister, a programme that will allow Greece to return to prosperity," said Dr Merkel, adding that eurozone countries had already shown "a lot of solidarity with Greece".
Without any proposals, the European digital commissioner Gunther Oettinger told German media, any new negotiations would be "meaningless".
Greece's new finance minister Euclid Tsakalotos said Greece wants "to continue the discussion".
Mr Tsakalotos, who admitted to having "stage fright" upon assuming the post "not at the easiest moment in Greek history", was thrust into the spotlight Monday after the surprise resignation of his firebrand predecessor Yanis Varoufakis.
Positions among Greece's 18 partners in the eurozone vary ahead of Tuesday's summit.
Germany, Finland, Slovakia and the Baltic states have taken a notably harder line, whereas France, Italy and Spain have adopted a more conciliatory tone.
Despite its tougher approach to debt relief, Germany said on Monday eurozone leaders should discuss humanitarian aid for a country fatigued by years of belt-tightening and chronic unemployment.
The White House urged all parties to seek a compromise that would keep Greece in the euro zone and place its economy "on a path toward debt sustainability but also economic growth".
The special summit is set to begin at 1600 GMT, after a meeting of eurozone finance ministers.
European Commission head Jean-Claude Juncker is also scheduled to speak, for the first time since the Greek vote, during a session of the European Parliament in Strasbourg in the morning.
In Sunday's plebiscite, Greeks voted by 61.31 per cent to 38.69 per cent to reject austerity terms in exchange for releasing more funds under an international bailout package.
The result dealt a body blow to the vision of European integration, but elated parties campaigning against austerity and loss of national sovereignty.
Athenians were set to awake yet again Tuesday to the grim reality of closed banks and more lines at cash machines to make their daily withdrawal limit of 60 euros (S$89), as fears grew the ATMs could soon run dry.
"I'm very afraid we will get no cash anymore in the coming days. They really have to fix it, end of this week at the latest, otherwise it (the economy) is collapsing," said pharmacist Lambros Vritios.
The European Central Bank, which has been keeping Greek lenders afloat, meanwhile said it had decided to maintain emergency funding to Greek banks - so-called Emergency Liquidity Assistance (ELA) - at the level set on June 26, keeping it at roughly 89 billion euros.
But it noted that the key financial support can only be provided against sufficient collateral.
"In this context, the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA," the statement said, a move that will make it more difficult to access ELA funds in the future.
Late on Monday, a Greek government source said Mr Tsipras had spoken to ECB chief Mario Draghi to stress that Greek banks, closed last week to prevent a run on deposits, needed to reopen with assistance from the Frankfurt-based lender.
Mr Tsipras also spoke to IMF chief Christine Lagarde "on the need to find a viable solution dealing with the real problems of the Greek economy," the source said.
'HIGH CHANCE' OF GREXIT
Greece last week defaulted on a 1.5 billion euro repayment to the International Monetary Fund but Ms Lagarde said her organisation was "ready to assist Greece if requested to do so".
Market reactions to the referendum were mostly muted, suggesting limited contagion from a possible "Grexit", or Greece's exit from the eurozone.
More than three-quarters of Greeks want to stay in the eurozone, according to surveys, but analysts are now putting the chances of a Grexit at "very high".
Mr Tsipras, 40, insists that instead of Grexit, the creditors will now finally have to talk about restructuring Greece's massive 240 billion euro debt.
The last EU-IMF bailout for Greece expired last Tuesday, despite Tsipras's appeals for it to be extended.
Greece was officially declared in default on Friday by the European Financial Stability Facility, which holds 144.6 billion euros of Greek loans.
Read more on the Greek crisis here