Debt crisis: Eurozone leaders try to thrash out Greek deal

Eurozone leaders have talked through the night in Brussels in a bid to agree terms for a new bailout for Greece.

Reports say a draft compromise has been put to the emergency summit but no details have emerged so far.

Without a new bailout, Greece’s banks face collapse and the country could exit the euro.

Eurozone finance ministers submitted a list of measures to the leaders following two days of fraught discussions.

But one Greek government official called the proposals “very bad”.

Another unnamed official said some of the proposals appeared designed to “humiliate” the Greek Prime Minister Alexis Tsipras and his left-wing Syriza government.

The summit was paused for several hours overnight to allow talks between Tsipras, German Chancellor Angela Merkel, French President Francois Hollande and European Council President Donald Tusk.

Early on Monday, Tusk’s spokesman announced the summit was reconvening to discuss a “compromise proposal”.

The four-page document of draft proposals put forward by eurozone finance ministers include:

*Reforms set out by Greece to be ratified by parliament by Wednesday, 15 July

*”Ambitious” reforms to pensions and labour markets

*International creditors to work on the ground in Athens and have full oversight of draft legislation

*Possible transfer of €50bn in “valuable” Greek assets to external fund for eventual privatisation

*Possible talks on “swift negotiations on a time-out from the euro area, with possible debt restructuring” if a bailout is not agreed

However, one senior EU official said there was no chance of “time-out” proposal surviving in any final document to be approved by eurozone leaders. Another official said there was no provision and therefore no legal basis for such an arrangement in the EU treaties.

Reports also emerged that Greece was holding out over the proposed role of the IMF in the new programme and over the independent fund to hold Greek assets.

Arriving for Sunday’s meeting, Hollande dismissed any suggestion of a “time-out” for Greece.

“There is no temporary Grexit, there is a Grexit or there is not a Grexit,” he said, adding that he would “do everything to find a deal tonight”.

Tsipras was also upbeat, telling reporters: “I’m here ready for an honest compromise… we can reach an agreement tonight if all parties want it.”

But Mrs Merkel said “the most important currency has been lost… trust and reliability” in the last few months of negotiations with Greece, and there would be “no agreement at any price”.

“We have to make sure the pros outweigh the cons – for Greece’s future, for the entire eurozone and the principles of our collaboration,” she said.

The head of the European Parliament, Martin Schulz, said a deal was absolutely vital to the future of Europe, reports the BBC.

“The alternative will be that over the next few years we are going to find ourselves in a catastrophic state of affairs as far as Greece is concerned,” he told a news conference in Brussels.