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European leaders say accord between Greece, creditors is possible ahead of Monday's summit

06/21/2015 01:57 EDT | Updated 06/21/2016 05:59 EDT
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-ailing Greece in the Eurozone.

Hollande said that "if the Greeks leave the eurozone 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 has been meeting with his senior ministers all day and will leave 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 ailing 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 which 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 1.6 billion euro ($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.

The governing Syriza party is holding an Athens rally later Sunday in support of the government — that comes after a strong rally Thursday of those favouring a deal with the EU.

Syriza and similar leftist political groups have organized "solidarity to Greece" rallies across Europe over the weekend or joined related protests such as an anti-austerity march in the United Kingdom on Saturday.

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D'Emilio reported from Rome, Italy.