between Greek prime minister Alexis Tsipras and distrustful European leaders have dragged past a self-imposed weekend deadline without an agreement that would give Greece a financial rescue package.
If the talks do not succeed, some eurozone leaders have warned that Greece could be temporarily forced out of the euro, which the country has been a part of since 2002.
No country has ever left the joint currency, which launched in 1999, and there is no mechanism in place for one to do so.
Going into a third straight day of negotiations between Greece and its international creditors, Mr Tsipras continued to hold out for a better deal to sell to his reluctant legislature in Athens this week, even though financial collapse is getting closer by the day.
Splits emerged among the nations sharing the euro as well, with German chancellor Angela Merkel demanding tough conditions before releasing aid to Greece while French president Francois Hollande prioritised unity among the nations that use the euro.
It was not entirely clear what a temporary exit from the euro would entail, but the threat of expulsion put intense pressure on Mr Tsipras to swallow politically unpalatable austerity measures because his people overwhelmingly want to stay in the eurozone.
Greece has requested a three-year, €53.5bn financial package, but that number grew larger by the tens of billions as the negotiations dragged on and the leaders calculated how much Greece will need to stay solvent.
The creditors are demanding tough austerity measures in exchange for Greece’s third bailout in five years.
Several officials said there were still wide differences among the 19 leaders of the eurozone countries on the terms of the austerity package and the timing of its implementation.
Early Monday, a Greek official said the key sticking points were the involvement of the International Monetary Fund (IMF) in Greece’s bailout programme and a proposal that Greece set aside €50bn worth of state-owned assets in a fund for eventual privatisation.
The official said any agreement would provide quick help for Greek banks from the European Central Bank (ECB). Without it, they risk running out of money this week.
The negotiations began on Saturday with a meeting of finance ministers. The heads of state convened mid-afternoon yesterday and were still negotiating at dawn today.
The deal on the table appeared to include commitments from Mr Tsipras to push a drastic austerity programme including pension, market and privatisation reforms through parliament by Wednesday, and from the 18 other eurozone leaders to start talks on a new bailout programme.
Yesterday’s four-page discussion paper put to eurozone leaders spoke of a potential “time-out from the euro area” for Greece if no agreement could be found.
It highlighted the increasing frustration of European leaders during five months of fruitless talks with Greece.
Ms Merkel said: “The most important currency has been lost: that is trust and reliability.”
Mr Tsipras insisted his government was ready to clinch a deal.
“We owe that to the peoples of Europe who want Europe united and not divided,” he said. “We can reach an agreement tonight if all parties want it.”
Mr Hollande insisted it was vital to keep Greece in the euro and said in the event of a departure, “it’s Europe that would go backward. And that I do not want.”
Greece has received two previous bailouts, totalling €240bn, in return for deep spending cuts, tax increases and reforms from successive governments.
Although the country’s annual budget deficit has come down dramatically, Greece’s debt burden has increased as the economy has shrunk by a quarter.
The Greek government has made getting some form of debt relief a priority and hopes that a comprehensive solution will involve European creditors at least agreeing to delayed repayments or lower interest rates.
Greek debt stands at around €320bn – a staggering 180% or so of the country’s annual gross domestic product.
Few economists think that debt will ever be fully repaid.
Last week, the IMF said Greece’s debt will need to be restructured.