The EU cancelled a full 28-nation summit on Sunday to decide whether Greece stays in the European single currency as a divided eurozone struggled to reach a reform-for-bailout deal.
The summit had been billed as a last chance to stop Greece crashing out, but was scrapped as eurozone finance ministers returned on Sunday to marathon talks after failing overnight to overcome distrust with Greece's leftist Government.With Greece facing growing misery from capital controls and fears its banks could collapse within days, a meeting of the leaders of the 19 countries that use the euro was still due to go ahead in Brussels.
“I have cancelled EUCO (the European Union summit) on Sunday,” European Council President Donald Tusk tweeted. "Eurosummit to start at 1600 (1400 GMT) and last until we conclude talks on Greece.” The talks on Saturday ended with deep divisions about whether to trust Greece's radical Prime Minister Alexis Tsipras with a third bailout worth more than 80 billion euros ($89 billion), following months of wrangling.
Fiscal hawks Germany floated a plan for a temporary ‘Grexit’ from the euro while Finland reportedly decided flat out not to accept a new Greek rescue programme, causing panic. Their downbeat assessment came despite Greece's international creditors calling Athen's new proposals a positive step forward after months of wrangling on a follow-up to two previous bailouts in 2010 and 2012 worth 240 billion euros.
The proposals -- including pension cuts and tax hikes that had been largely rejected by Greeks in a referendum a week ago -- were approved by the Greek parliament in the early hours of Saturday.In Greece, there is growing alarm at capital controls that have closed banks and rationed cash at ATMs for nearly two weeks, leading to fears that food and medicine will soon run short.