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European leaders working to keep Greece in euro zone

 
Anti-austerity Greeks wave flags of the ruling Syriza party during a rally outside the parliament in Athens on Sunday. Greece is on the verge of default and exit from the eurozone.
Anti-austerity Greeks wave flags of the ruling Syriza party during a rally outside the parliament in Athens on Sunday. Greece is on the verge of default and exit from the eurozone.
Published June 22, 2015

ATHENS, Greece — A day ahead of a crucial emergency eurozone summit, European leaders renewed efforts to reach a deal between Greece and its creditors that would allow the debt-ridden country to avoid a default and a potentially disastrous exit from the euro.

Greek Prime Minister Alexis Tsipras had separate telephone conversations Sunday with French President Francois Hollande, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker, the prime minister's press office said.

Tsipras "presented to the three leaders Greece's proposal for a mutually beneficial agreement, which will provide a permanent solution and not just postpone tackling the problem," the press office statement said.

Later Hollande told reporters in Milan, where he met with Italian Premier Matteo Renzi, that everything must be done to keep financially struggling Greece in the euro zone.

Hollande said that "if the Greeks leave the euro zone it won't be positive for the Greeks or Europeans."

"We need stability" especially since much of Europe is beginning to rebound economically, he said. "For this reason we must reach an accord."

Renzi added that European leaders were working to have an agreement with Greece "in the next hours," but didn't provide any details.

Tsipras met with his senior ministers all day and left for Brussels later Sunday.

Talks between cash-strapped Greece and its creditors on the completion of an earlier bailout deal had already hit a snag before the January election of the anti-bailout, anti-austerity coalition government headed by the radical leftist Syriza party. As a result, Greece has not received any bailout funds since summer 2014 and its banking system is only kept afloat through a weekly infusion of emergency funds from the European Central Bank.

The new government's radically different approach, essentially denying the need for austerity measures that it calls "recessionary" has often stretched the talks in the past five months to the breaking point.

Now the race is on to prevent the country's default. Greece is facing a June 30 deadline to make a $1.8 billion loan repayment to the International Monetary Fund, which, at present, it would be unable to make, and even bigger payments to the ECB in July. With both Greece and the creditors seemingly locked in a who-will-blink-first contest, the battle is on to bridge the gaps and secure a deal.