Eurozone leaders have broadly welcomed new proposals for Greek reforms amid hopes a deal can be struck within days to stop Greece defaulting on its debt.
German Chancellor Angela Merkel said Greece’s latest offer constituted “some progress”. But she said more work was needed and “time is short”.
Greece must repay a €1.6bn (£1.1bn) International Monetary Fund (IMF) loan by the end of the month.
If it fails to do so, it risks crashing out of the euro and possibly the EU.
Although no deal has been struck, key obstacles appear to have been cleared, the BBC’s Damian Grammaticas reports from Brussels.
The deal being formed is believed to include:
- New taxes on businesses and the wealthy
- Selective increases in VAT
- Savings in pensions linked to curbing early retirement and increasing pension contributions
- No further reductions in pensions or public-sector wages – “red lines” for Greece’s Syriza government
Eurozone finance ministers meet again on Wednesday. They hope to approve a package to be put to eurozone leaders for final endorsement on Thursday morning.
Only once agreement is reached will creditors unlock the final €7.2bn tranche of bailout funds.
The move was received with cautious optimism by leaders of 18 other eurozone nations gathered for an emergency summit in Brussels.
After the talks ended on Monday evening, Mrs Merkel said that everyone taking part wanted Greece to stay in the eurozone, “myself included.
“The proposals offered by Greece today constitute some progress. However, it became clear during our discussions that there is a lot of work to be done and time is short,” she said.
Mrs Merkel said she was open to considering debt relief – which Greek Prime Minister Alexis Tsipras says is needed to secure support for reforms at home – but only after the present negotiations are completed.
Commentators say Greece’s massive debt will need to be restructured if it is to escape the cycle of scrambling to secure funds to pay off looming bills to creditors.
Mr Tsipras also met the heads of Greece’s three international creditors – the IMF, the European Commission and the European Central Bank (ECB) – in Brussels.