BRUSSELS (Bloomberg) - Prime Minister Alexis Tsipras was given three days to push new austerity measures through parliament and keep alive Greece's chances of staying in the euro.
Finance ministers meeting in Brussels demanded Greece enact economic reforms before opening detailed negotiations on an aid package of at least 74 billion euros (S$111.6 billion).
They left it to the region's leaders, who started their own session a few hours later, to pin down how far those measures should go. If Tsipras misses that deadline, Greece may be suspended from the currency union, Finnish Finance Minister Alexander Stubb said.
"Greece is being given exactly two choices," Stubb said. "It's a rather black-and-white choice."
Riled by six months of personal attacks and contradictory messages from Athens, euro-area policy makers are forcing Tsipras to overcome the credibility gap they said was a key hurdle to more loans. They're no longer willing to take him at his word.
"The situation is extremely difficult if you consider the economic situation in Greece and the worsening in the last few months, but what has been lost also in terms of trust and reliability," German Chancellor Angela Merkel told reporters.
With Greek banks rationing cash and the European Central Bank reviewing how long it can keep the country's financial system alive, Tsipras won a stay of execution as he arrived at the summit when a Sunday meeting of the 28 European Union leaders was canceled.
The full group of leaders would only have gathered to discuss how to handle Greece's exit from the euro, Maltese Prime Minister Joseph Muscat said.
The euro fell in early Asian trading, declining 0.5 percent to $1.1107 as of 3.08 am (Singapore time).
The leaders' summit began with presentations on the state of play from officials including Jeroen Dijsselbloem, the finance ministers' leader, European Central Bank President Mario Draghi and Tsipras himself, according to an EU official.
The leaders then set out their own positions before they broke for bilateral meetings. Tsipras will hold a session with Merkel and French President Francois Hollande, a Greek official said.
Creditors are using the calendar as leverage on Greece. Tsipras's predecessors were given months to enact economic reforms after tapping the first bailout loans in 2010.
Greece is asking for 22 billion euros by the end of August to cover its immediate needs and as much as 86 billion in total, Maltese Finance Minister Edward Scicluna said in an interview. The country owes the ECB about 3.5 billion euros on July 20 and missed a payment of about $1.7 billion to the International Monetary Fund June 30.
"I'd like to see them demonstrating starting tomorrow in their parliament they're serious about implementing the changes, legislative and structural, that need to be put in place," Irish Prime Minister Enda Kenny said. "And there are many of them." Comments in Greece suggested the pressure was having its intended effect.
An unsigned commentary in the Sunday edition of Avgi newspaper, seen as a Syriza party mouthpiece, said Tsipras must seal a deal, then address political fallout that is "driving the country to elections in a short time."
"The country has only the road of realism," Kostis Hatzidakis, an opposition New Democracy lawmaker and former minister, said on Skai TV on Sunday. "The time for criticisms will come, but we have to escape the eye of the storm first."
Greece has already caved to creditors' demands, with lawmakers endorsing Tsipras's plan to increase sales taxes and cut pensions in the early hours of Saturday. The vote marked an abrupt turnaround for the Greek leader, who'd won an anti- austerity referendum a week earlier accusing the rest of the euro area of trying to blackmail his country.
"I am ready for an honest compromise," Tsipras told reporters as he arrived. "We owe it to the people of Europe that want a united, not divided, Europe. We can reach an agreement tonight if the parties involved want it."
Some ministers on Sunday wanted Greece to place about 50 billion euros of state assets into an independent company that could serve as collateral against aid loans, Luxembourg's finance chief Pierre Gramegna told reporters.
"It would remain in Greek hands, but it would create more assurances," Gramegna said. "There is great hesitation from the Greek side and now the heads of state and government have to choose."