Greek proposals create hope for deal

ATHENS - Eurozone leaders have broadly welcomed new proposals for Greek reforms amid hopes a deal can be struck within days to stop Greece defaulting on its debt.

German Chancellor Angela Merkel said Greece's latest offer constituted "some progress". But she said more work was needed and "time is short".

Greece must repay a €1.6bn (£1.1bn) International Monetary Fund (IMF) loan by the end of the month.

If it fails to do so, it risks crashing out of the euro and possibly the EU.

Although no deal has been struck, key obstacles appear to have been cleared, the BBC's Damian Grammaticas reports from Brussels.

The move was received with cautious optimism by leaders of 18 other eurozone nations gathered for an emergency summit in Brussels.

The European Central Bank (ECB) approved additional emergency funding for Greek banks to cover withdrawals, allowing banks to stay open and providing breathing space for a deal to be reached.

It has acted repeatedly after anxious savers withdrew more than €4bn in recent days.

The Greek banking system is on the verge of collapse due to savers' loss of confidence.

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