Prospects of new Greek rescue rise at euro zone summit

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What Greece's 'No' Vote to Bailout Means

Greek Prime Minister Alexis Tsipras won a commitment to seek a last-minute rescue at an emergency euro zone summit on Tuesday, before his country's banks run out of money.

Italian Prime Minister Matteo Renzi told reporters that EU leaders would hold a further summit on Sunday to approve a plan to aid Greece if creditor institutions are satisfied in the meantime with a Greek loan application and reform commitments.

"The ball is in Greece's court," Renzi said. "Next Sunday the final meeting will take place on Greece."

Greece reacts after the referendum:

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Greece after the referendum
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Prospects of new Greek rescue rise at euro zone summit
ATHENS, GREECE - JULY 13: Pensioners talk to bank staff as they wait to collect their pensions outside a National Bank of Greece branch in Kotzia Square on July 13, 2015 in Athens, Greece. Eurozone leaders have reportedly made an 'agreement' on the Greek debt crisis in Brussels. After lengthy talks EU President Donald Tusk tweeted that a bailout programme was 'all ready to go'. (Photo by Christopher Furlong/Getty Images)
A woman burns the flag of the ruling party Syriza, surrounded by journalists, in front of the Greek parliament in Athens, during an anti-EU demonstration in Athens calling for a no to any agreement with the creditors on July 13 , 2015. Eurozone leaders struck a deal on a bailout to prevent debt-stricken Greece from crashing out of the euro forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
Leftist protester holds a greek flag in front of the Greek parliament as they take part an anti-EU demonstration in Athens calling for a 'NO' to any agreement with the creditors on July 13, 2015. Eurozone leaders struck a deal Monday on a bailout to prevent debt-stricken Greece from crashing out of the euro, forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO / ANDREAS SOLARO (Photo credit should read ANDREAS SOLARO/AFP/Getty Images)
People read newspaper headlines in central Athens on July 13, 2015. Greece reached a desperately-needed bailout deal with the eurozone on July 13 after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency. The country's leftist Prime Minister Alexis Tsipras agreed to tough reforms after 17 hours of gruelling negotiations in return for a three-year bailout worth up to 86 billion euros ($96 billion), Greece's third rescue programme in five years. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
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German Chancellor Angela Merkel, who arrived in Brussels saying there was still no basis for reopening negotiations with Athens, changed her tune in the room and was actively involved in efforts to find a last-ditch solution, euro zone sources said.

"It is not a matter of weeks but of a few days" to save Greece from collapse, Merkel told reporters on arrival.

With Greek banks down to their last few days of cash and the European Central Bank tightening the noose on their funding, Tsipras tried to convince the euro zone's other 18 leaders to authorize a new loan swiftly.

People familiar with Greece's financial system said the banks could start running out of money within two days unless there was an international rescue.

The latest updates and analysis on the #Greekcrisis:

However, euro zone sources in Brussels said ECB President Mario Draghi had assured finance ministers that the central bank would keep Greek lenders afloat this week as long as negotiations were under way.

Merkel and French President Francois Hollande worked together on a plan to save Greecefrom plunging into economic turmoil and possibly having to ditch the euro. This involved a medium-term conditional program and a short-term interim financing deal for a few months, the sources said.

However, a solution still depends on Tsipras putting forward convincing reform proposals and rushing key measures through parliament by the weekend to make Greece's public finances sustainable.

If he does, bridge financing could be provided by "Greece's friends" and by releasing past ECB profits on Greek bonds, to prevent Athens from missing a crucial 3.5 billion euro bond redemption to the ECB on July 20, the sources said.

Photos of Greece's fallout from the financial crisis:

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Greece Bailout Bankruptcy
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Prospects of new Greek rescue rise at euro zone summit
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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Some of Athens' 18 partners in Europe's common currency vented exasperation at five years of crisis wrangling with Greece. Lithuanian President Dalia Grybauskaite complained: "With the Greek government it is every time manana."

Merkel, under pressure in Germany to cut Greece loose, made clear it was up to Tsipras to present convincing proposals after Athens spurned tax rises, spending cuts and pension and labor reforms that were on the table before its 240 billion euro ($262.7 billion) bailout expired last week.

Euro zone finance ministers complained that their new Greek colleague Euclid Tsakalotos, while more courteous than his abrasive predecessor Yanis Varoufakis, had brought no new proposals to a preparatory meeting before the summit.

The psychology behind the Greek 'No':

"I have the strong impression there were 18 ... ministers of finance who felt the urgency of the situation and there is one ... who doesn't feel the urgency of the situation," Belgian Finance Minister Johan Van Overtveldt said.

Greek officials said the leftist government broadly repeated a reform plan Tsipras sent to the euro zone last week before Greek voters, in a referendum on Sunday, overwhelmingly rejected the austerity terms previously on offer for a bailout.

Jeroen Dijsselbloem, chairman of the Eurogroup of currency zone finance ministers, said the ministers would hold a conference call on Wednesday to review a Greek request for a medium-term assistance program from the European Stability Mechanism bailout fund, due to be submitted within hours.

Tsipras met privately with the leaders of Germany and France, the currency area's main powers, and European Commission president Jean-Claude Juncker just before the summit began.

(Additional reporting by Costas Pitas, Angeliki Koutantou and George Georgiopoulos in Athens, Julia Fioretti and Alastair Macdonald in Brussels, Paul Carrel in Berlin John O'Donnell in Frankfurt and Mark John in Paris; Writing by Paul Taylor; Editing by Mark Trevelyan)

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