Hopes for Greek debt deal with one week to go

Greece and its creditors were working to seal a bailout deal with exactly one week to go Tuesday before Athens is due to repay the IMF around 1.5 billion euros or face default and a possible exit from the EU.

After an emergency summit in Brussels, they ordered their finance ministers to hold fresh talks on Wednesday to thrash out the details ahead of a full meeting of all 28 EU leaders on Thursday.

The Greek proposals were a last-ditch bid to unlock the final 7.2-billion-euro tranche of its aid plan, which creditors have refused to release unless Greece agrees to more austerity measures.

Cash-strapped Greece is at risk of defaulting on a 1.5-billion-euro ($1.7-billion) IMF payment on June 30 if it fails to get a deal to extend its international bailout by the same day.

- Sticking points -

EU sources told AFP that Greece had now met 90 percent of the conditions set by its creditors.

One remaining sticking point was over Greece's proposals for VAT measures that would raise an extra 0.75 percent of Greece's gross domestic product, which the creditors say should be at 1.0 percent. The creditors suggested Greece increase VAT on hotels and restaurants from 13 percent to 23 percent.

Growing fears of a bank run in Greece amid a huge outflow in deposits prompted the ECB on Monday to inject more emergency funding into Greek banks to cover withdrawals.

Several demonstrations backing Greece's stand against more austerity measures were held in European capitals including Brussels, Berlin, Rome and Paris over the weekend.

Failing a deal, Greece is likely to miss the IMF payment of around 1.5 billion euros, setting up a "Grexit" from the eurozone, which Greece's central bank has said could also see it cast out of the EU.

The EU's involvement in Greece's bailout, which was to provide 240 billion euros in loans in exchange for drastic austerity measures and reforms, runs out at the end of this month, but IMF support is scheduled to continue to March 2016.