Merkel urges caution over Greek bailout

EU officials are cautious about the prospects of reaching a deal to keep Greece from defaulting and falling out of the currency union.

Ahead of an emergency summit in Brussels, German Chancellor Angela Merkel warned against expecting too much, saying “there are still a lot of days left to reach a decision”.

Greece needs more loans from its creditors, which include its fellow eurozone states and the International Monetary Fund, in time for June 30, when it faces a debt repayment it cannot afford.

The country has been negotiating for four months what economic reforms it should make to get the money.

After Monday’s meetings of eurozone finance ministers and European leaders, another leaders’ summit is planned for Thursday and Friday.

Jeroen Dijsselbloem, who heads the eurozone meetings of finance ministers, said it would be impossible to get “a final assessment” on Monday.

Ahead of the meetings, Greek Prime Minister Alexis Tsipras made new proposals on the economic reforms and budget cuts his country would accept.

European Commission President Jean-Claude Juncker said they were a sign of progress but warned that “we are not yet there”.

No details of the proposals were made public, but investors were hopeful that they represented a long-awaited compromise.

Despite the markets rallying, tension was palpable in Greece, where people flocked to cash machines to withdraw money. The concern is that a debt default by Greece could destabilise the country enough that it might have to eventually leave the euro.

To support Greek banks in the face of growing money withdrawals, the European Central Bank increased the amount of emergency credit it allows the banks to draw on, a banking official said.