European officials warn deal on Greece may not happen Monday

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Greek Leaders Optimistic Debt Repayment Plan Can Be Reached

BRUSSELS (AP) — European officials were cautious about the prospects of reaching a comprehensive deal on Monday to keep Greece from defaulting and falling out of the currency union, despite optimism in financial markets.

Ahead of an emergency summit in Brussels, German Chancellor Angela Merkel warned against expecting too much on Monday, 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.

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European officials warn deal on Greece may not happen Monday
ATHENS, GREECE - JULY 03: Pensioners without ATM cards wait in queue outside a bank branch to withdraw money from their pension funds on July 03, 2015 in Athens, Greece. (Photo by Salih Baran/Anadolu Agency/Getty Images)
Pensioners wait outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
ATHENS, GREECE - JUNE 29: People wait in line to withdraw 60 euros from an ATM after Greece closed its banks on June 29, 2015 in Athens, Greece. Greece closed its banks and imposed capital controls on Sunday to monitor the growing strains on its crippled financial system, bringing the prospect of being forced out of the euro into plain sight. (Photo by Milos Bicanski/Getty Images)
A man withdraws the withdrawal limit of 60 euros at an ATM machine in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Pensioners queue outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Foreign anti-EU activists protest in front of the Greek parliament in Athens, during a demonstration calling for 'NO' at referendum and for Greece's exit from the eurozone on June 28, 2015. Greek Prime Minister Alexis Tsipras stunned Europe late Friday with a surprise call for a July 5 referendum on the latest cash-for-reforms package and advised voters against backing a deal that he said spelled further 'humiliation'..AFP PHOTO / LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 28: People wait in a queue in front of a bank's ATM to withdraw their cash in Athens, Greece on June 28, 2015. Greeks are anxious about whether the European Central Bank will increase the emergency liquidity assistance, banks can draw on from the country's central bank or not. (Photo by Ayhan Mehmet/Anadolu Agency/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Greek Presidential Guard conducts his ceremonial march as protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building in Athens, Greece, June 21, 2015. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 3: A Greek flag billows in the wind on the Acropolis Hill on June 3, 2015, in Athens, Greece. Greek Prime Minister Alexis Tsipras is expected to be presented with the international creditors' plan of tough economic reforms for Greece in order to unlock 7.2 billion Euros of rescue loans later today. It is unclear whether Greece will accept the offer, as Tsipras has previously called for his own proposals to be considered by the creditors (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15:.Woman pass by Hellenic Exchange office in Athens on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images))
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
A woman walks past Bank of Greece headquarters in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 15: Locals visit the Green market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Pensioners play backgammon in front of closed shop on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Women buy on cheep clothing at a flea market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
A man walks past graffiti featuring the word 'Time' but using the Euro sign in place of the letter 'e'on a wall in Athens on June 15, 2015. Greek Prime Minister Alexis Tsipras insisted in an oped piece in a Greek newspaper on June 15, 2015 that Athens would 'wait patiently' until the International Monetary Fund and the European Union became 'more realistic', a day after last-ditch talks between the two sides collapsed, bringing the threat of a Greek exit from the euro closer than ever. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
An elderly men stands outside the Athens central market on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 15: Local people pass by graffiti that says 'Greece vs Everybody' on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
People read newspaper's headlines in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
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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. The Athens stock index was up 6.4 percent while Stoxx 50 of top European shares was 2.9 percent higher.

Despite the market rally, tension was palpable in Greece, where people flocked to cash machines to withdraw money. The concern is that a debt default by Greece could destabilize 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.

The official, who spoke only on condition of anonymity because the decision had not been made public, said the ECB remains on call in the coming hours and days to revise the amount of credit to Greek banks.

Reports indicate Greeks withdrew about 4 billion euros last week.

"Everyone's going (to the banks) to take money," said Yannis Nikolopoulos in Athens. He said people are taking "money to have at home for 10, 15 days — say 1,000, 500 euros — because if the banks shut it'll be a problem to go shopping and that sort of thing."

He said that a deal between Greece and its creditors "is mandatory at all costs, otherwise we're doomed."

An exit from the euro would be hugely painful for Greeks, plunging the country back into a deep and long recession. Experts are more divided about its effects on Europe and the world economy. Some say it would be manageable, but others note there is huge uncertainty. Several European countries have said publicly they are getting prepared for such an eventuality.

Greece has a debt repayment on June 30 worth 1.6 billion euros that it cannot afford without more loans. The talks are currently about releasing the last 7.2 billion euros in the country's bailout program, which expires at the end of the month.

Since coming to power in January, the new government has refused to make more budget austerity measures, which it blames for devastating the economy. It has since softened its approach, but it remains reluctant to take the steps creditors demand.

Over the past weeks, the creditors have often complained that Greek proposals on what kind of reforms they would implement have been too slow to come and far too vague.

German Finance Minister Wolfgang Schaeuble said Monday that despite the new Greek plan, "we have so far received no substantive proposals."

"That is why we are unable to provide adequate preparation" for Monday night's summit, he said.

Before leaders gather on Monday evening, eurozone finance ministers will also gather in Brussels to pore over the details of Greece's proposal and confirm whether it meets the demands of creditors.

About 5,000 people attended a pro-government rally in central Athens Sunday night. Pro-EU forces will gather Monday evening outside the Greek Parliament.

___

Nathalie Savaricas in Athens contributed to this report.

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