Eurozone leaders: Greece must do more to earn rescue

European leaders told Greece current conditions did not allow for further negotiations on a rescue plan.

Greek Prime Minister Alexis Tsipras on 6 July 2015. Picture: AFP.

BRUSSELS - Eurozone leaders have given Greece until Wednesday to implement key reforms before any talks on a third bailout for the country can begin.

Talks in Brussels ended without a final agreement on Sunday afternoon after European leaders told Greece current conditions did not allow for further negotiations on a rescue plan.

If Greece takes the deal Prime Minister Alexis Tsipras will have to push the required measures through parliament from Monday.

Some laws will have to be passed by Wednesday and the entire package endorsed by parliament before talks can start, one minister said.

Tsipras said on arrival in Brussels he wanted "another honest compromise" to keep Europe united.

"We can reach an agreement tonight if all parties want it," he said.

But German Chancellor Angela Merkel, whose country is the biggest contributor to eurozone bailouts, said the conditions were not yet right to start negotiations, sounding cautious in deference to mounting opposition at home to more aid for Greece.

"The most important currency has been lost and that is trust," she told reporters. "That means that we will have tough discussions and there will be no agreement at any price."

European Council President Donald Tusk cancelled a planned summit of all 28 EU leaders that would have been needed in case of a Greek exit from the single currency, and said eurozone leaders would keep talking "until we conclude talks on Greece".

Eurogroup finance ministers wrapped up a meeting broken off after nine hours of acrimonious debate on Saturday night without a firm recommendation on Greece's application for a three-year loan on the basis of reform proposals Tsipras sent on Thursday.

A Eurogroup document seen by Reuters said Greece must pass laws to change its value added tax and pension systems, reform bankruptcy rules and strengthen the independence of its statistics office before bailout talks can even begin.

Eurogroup chairman Jeroen Dijsselbloem said that while ministers had made good progress, a couple of big issues were left for the leaders to resolve.

"The Eurogroup ... came to the conclusion that there is not yet the basis to start the negotiations on a new programme," the document sent to national leaders said.

"Only subsequent to legal implementation of the above mentioned measures can negotiations on the memorandum of understanding commence, subject to national procedures having been completed," it said, in a reference to authorisation by national parliaments in countries such as Germany.

The draft said Greece needed €7 billion by 20 July, when it must make a crucial bond redemption to the European Central Bank, and a total of €12 billion by mid-August when another ECB payment falls due.

It did not say how those needs would be met, and EU officials said finance ministers had been unable to agree on emergency finance.