Greece faces choice of more austerity or exit from euro
EU leaders have issued Greece with its final ultimatum: accept austerity or leave the eurozone for five years.
The extraordinary proposal was contained in a draft document that has been considered separately by the heads of government and the eurozone finance ministers.
The document also says Greece should hand over €50bn of Greek assets to eurozone authorities.
There was widespread anger in response to the proposals, which were tabled following one of the most dramatic weekends in the history of the eurozone.
It emerged that up to nine member states were yesterday openly considering the idea of a 'Grexit' as patience ran out with the Syriza-led government.
During a day of heated negotiations, German Chancellor Angela Merkel warned of a major breakdown of trust with the Greek government.
"The most important currency has been lost and that's trust. There can be no agreement at any cost," Ms Merkel told reporters.
A dramatic two-day summit in Brussels has seen tempers flare, relations plummet and speculation that the Finnish government was on the verge of collapse over a €75bn-plus bailout deal for Greece.
But late last night, it emerged that a German proposal for a five-year 'Grexit' appeared in a draft document considered by finance ministers.
Greek Prime Minister Alexis Tsipras has been told that the five-year exit will be on the cards if he fails to pass a raft of draconian cuts through parliament, beginning today.
Irish officials said they had "no comment" to make on the proposal, which initially appeared in a German newspaper at the weekend.
"In case no agreement could be reached, Greece should be offered swift negotiations on a time-out from the euro area, with possible debt restructuring," the proposal stated.
Privately, both Irish and EU political sources admit that they are sceptical about Mr Tsipras's ability to persuade the Greek parliament to back the series of cuts.
If Greece meets the conditions, the German parliament would meet on Thursday to mandate Ms Merkel and Finance Minister Wolfgang Schauble to open the talks on a new loan.
Then Eurogroup finance ministers would meet again on Friday or at the weekend to formally launch the negotiations.
A Greek government official, in a first reaction to the draft, said: "How can they demand all these measures at the last minute without securing a lifeline to see us through till next week?"
But on the issue of reform measures, Taoiseach Enda Kenny said he expected the Greeks to begin implementing legislative changes in parliament as early as today.
"From Ireland's point of view, we are quite willing to work to bring this to a conclusion, where a solution can be reached, where negotiations can start on the detail of a third programme that will keep Greece in the eurozone," Mr Kenny said.
"I'd like to see them demonstrating... in their parliament that they are serious about implementing the changes, legislative and structural that need to be put in place - and there are many of them."
Several hardline countries voiced support for the German proposal that Greece take a five-year "time-out" from the euro unless it swiftly implemented much tougher conditions, notably by locking state assets to be privatised in an independent trust to pay down debt.
But French President Francois Hollande, Greece's strongest ally in the eurozone, dismissed the notion, saying it would start a dangerous unravelling of EU integration.
"There is no such thing as temporary Grexit, there is only a Grexit or no Grexit. There is Greece in the eurozone or Greece not in the eurozone. But in that case, it's Europe that retreats and no longer progresses and I don't want that," he said.
A European official said a Eurogroup meeting today could discuss ways to provide emergency finance to keep Athens afloat.