The EU has welcomed new proposals from Greek Prime Minister Alexis Tsipras as a "good basis for progress" at talks where creditors want 11th-hour concessions to haul Athens back from the brink of bankruptcy.
European Union chief executive Jean-Claude Juncker's chief-of-staff spoke of a "forceps delivery" as officials worked late into the night on Sunday to produce a deal ahead of a summit of euro zone leaders in Brussels on Monday that they hope can keep Greece in the currency bloc.
Giving no detail of a proposal he said was also received by the European Central Bank and International Monetary Fund, German EU official Martin Selmayr tweeted: "Good basis for progress at ... Euro Summit".
After four months of wrangling and with anxious depositors pulling billions of euros out of Greek banks, Tsipras's leftist government showed a new willingness at the weekend to make concessions that would unlock frozen aid to avert default.
It was not immediately clear how far the new proposal yielded to creditors' demands for additional spending cuts and tax increases, but the offer was a ray of hope that a last-minute deal may yet be wrangled before Athens runs out of cash.
Tsipras spent much of Sunday holed up in a marathon cabinet meeting and discussed the new offer with the leaders of Germany, France and the European Commission by phone.
"The prime minister presented the three leaders Greece's proposal for a mutually beneficial agreement that will give a definitive solution and not a postponement of addressing the problem," a statement from Tsipras's office said.
He will meet European Commission President Juncker, ECB President Mario Draghi, IMF head Christine Lagarde and euro zone finance ministers chairman Jeroen Dijsselbloem on Monday morning (local time), an EU spokeswoman said. Euro zone finance ministers are due to meet 90 minutes later, and a summit of euro zone prime ministers and presidents will be held on Monday night.
The euro was up against the US dollar on Monday.
European ministers have played down the prospect of a final agreement on Monday, but hope a political understanding can be reached in time for a full deal by the end of this month.
Elected on a pledge to end austerity, Tsipras has defiantly resisted demands to cut pension spending and is pushing strongly for debt relief in return for any concessions.
But Greek officials have said Athens may be willing to consider raising value-added taxes or other levies to appease the lenders, who want concrete assurances that demanding budget targets will be met.
"There is no time to lose. Every day counts. Talks and negotiations must continue so that an agreement is reached," French President Francois Hollande told a joint news conference with Italian Prime Minister Matteo Renzi.
Cash-strapped Athens
Locked out of bond markets and with bailout aid frozen since summer last year, Athens is quickly running out of cash. The deputy finance minister on Sunday confirmed Athens had enough money to pay public sector wages and pensions this month.
But Athens also urgently needs access to funds to avoid defaulting on a 1.6 billion euro IMF loan that falls due at the end of the month. As the crisis gets pushed from one meeting to the next, each side has put the responsibility on the other's shoulders for finding a deal.
Money has drained out of Greek banks after a breakdown in talks last weekend, and Greece might have to impose capital controls within days if there is no breakthrough.
Underlining the pressure to stem the flow of withdrawals, Bank of Greece Governor Yannis Stournaras met senior bankers on Friday and told them to brace for a "difficult day" on Tuesday if no deal is reached, two bankers at the meeting told Reuters.
For a deal to work, Tsipras will need a solution that is acceptable to his party or else may be pushed to call a snap election or a referendum to secure a mandate for an agreement.
Supporters of his Syriza party rallied in Athens on Sunday to send "a loud message of resistance" against demands for more cuts and tax hikes in a country battered by years of recession.
Under austerity measures imposed by the IMF, EU and ECB in two bailouts, Greece's economic output has fallen by a quarter, wages and pensions have been slashed and unemployment is running at 25%.
The Greek government has argued the austerity imposed on the southern European country had made the crisis worse. A senior Syriza lawmaker said on Sunday that previous ideas put forward by Juncker would have led to a "social holocaust".
"Democracy cannot be blackmailed, dignity cannot be bargained," the Syriza party said in a statement, announcing its planned protest.
"Workers, the unemployed, young people, the Greek people and the rest of the peoples of Europe will send a loud message of resistance to the alleged one-way path of austerity, resistance to the blackmail and scaremongering."
But the mood has also hardened in Germany, which has contributed more money than any other country to bailing out Greece. German Chancellor Angela Merkel is under pressure from within her ranks not to give in to Greek demands, even if that means contemplating Greece leaving the euro zone.
