Greece and its creditors hardened their stances yesterday after the collapse of talks aimed at preventing a default and possible euro exit, prompting Germany's EU commissioner to say the time had come to prepare for a "state of emergency".
Leftist Greek Prime Minister Alexis Tsipras ignored pleas from European leaders to act fast. Instead he blamed creditors for Sunday's breakdown of the cash-for-reform talks, the biggest setback in long-running negotiations to unlock aid for Greece.
Athens now has just two weeks to find a way out of the impasse before it faces a €1.6bn repayment due to the International Monetary Fund (IMF), potentially leaving it out of cash, unable to borrow and dangling on the edge of the currency area.
Germany and other creditor nations demanded that Athens come to its senses and offer new proposals.
"It won't work that Greece sets the terms and says 'everyone has to dance to our tune'. Greece needs to get back to reality," Volker Kauder, parliamentary floor leader of Chancellor Angela Merkel's conservatives, told ARD television.
Belgian Finance Minister Johan Van Overtveldt said the Eurozone's credibility would be damaged and radical forces in other countries emboldened if past accords with Greece were changed.
The European Commission said it would only resume mediation efforts if Greece put forward new proposals, while the Greek government spokesman said Athens was sticking to its rejection of wage and pension cuts and higher taxes on basic goods.
"We have largely exhausted our limits," spokesman Gabriel Sakellaridis said. Mr Tsipras' office said Greece was ready to restart talks at any time and was waiting for an invitation.
Despite the deepening crisis, Mr Tsipras is going ahead with a planned visit to Russia from Thursday, the day that Eurozone finance ministers hold a crucial meeting to review the standoff with Greece.
He is due to stay until Saturday, attend an economic forum in St Petersburg and meet President Vladimir Putin.
EU officials said that without improved Greek proposals by Thursday, the Eurogroup session would be very tough and was likely to present Greece with an ultimatum.
"No more new proposals; take it or leave it time is upon us, I think. Or very close." one Eurozone official said.
While there was little outward sign of panic in Athens as Greeks held out hope for a last-minute solution - a familiar theme in five years of crisis - the latest impasse triggered a sell-off in European and Asian shares and weighed on the euro.