Brussels: Greek Prime Minister Alexis Tsipras talked up hopes of a deal on his country`s rapidly expiring bailout on Thursday as he confronted EU leaders including German Chancellor Angela Merkel at his first Brussels summit.
Greece`s new anti-austerity government failed to secure an agreement to renegotiate the terms of the bailout programme in marathon talks between eurozone finance ministers Wednesday night, meaning the issue will go to the wire next Monday.
Tsipras will use Thursday`s summit to show the other 27 European Union leaders his austerity-light replacement plan for Greece`s 240-billion-euro ($270-billion) EU-IMF bailout, which expires at the end of February.
"I am very confident that all together we can find a mutually viable solution, in order to heal the wounds of austerity and to tackle the humanitarian crisis across the European Union," Tsipras, wearing a silk scarf and heavy coat, told journalists as he arrived for the talks.
But he warned too that it was a "crucial turning point for Europe."
The start of the summit was delayed by three hours after Merkel and French President Francois Hollande stayed through the night in Minsk to seal a peace deal to end the Ukraine conflict.
Powerful Germany is the stiffest opponent of the plans unveiled by Tsipras, whose hard-left Syriza party won elections in January on the back of huge popular discontent with years of austerity.
Greece refuses to extend its current bailout, but failure to agree a new deal means Athens could default and then almost certainly crash out of the 19-country eurozone.Merkel said as she arrived in Brussels that she "looks forward to welcoming our new Greek colleague" but indicated that there was still a long way to go with the negotiations.
"Europe is always geared to compromise... and Germany is ready for that. Nevertheless one has to say that Europe`s credibility is based on sticking to the rules and that we are reliable," she said.
"Now we will look which proposals Greece will make. Finance ministers will talk about it next Monday, we still have some days time."
World markets have been on tenterhooks over the outcome of the bailout row, fearing a catastrophic exit by Greece from the euro, but European stocks rose on Thursday with traders confident that a deal was still possible.
Under the Greek proposals, Athens would stick to 70 percent of the bailout reform commitments demanded by the EU and International Monetary Fund, but it would overhaul the remaining 30 percent it sees as toxic.
The government also wants a bridging loan until September to buy time to hammer out a new reform and bailout programme and, crucially, to ditch inspections by the hated troika of creditors -- the EU, IMF and European Central Bank.
Greek Finance Minister Yaris Varoufakis laid out the plans to his counterparts in Brussels on Wednesday night, but failed to seal an agreement after nearly six hours of often tense talks.Greek sources denied reports that there had been agreement on a joint statement with the other ministers, but that it was torpedoed by Tsipras after his finance minister called him to confirm.
European sources told AFP however that Greece had only raised objections following a 30-minute phone call between Varoufakis and Tsipras -- and after German finance minister Wolfgang Schaeuble had already left on the understanding the statement had been approved.
"I am very concerned about the situation," European Commission head Jean Claude Juncker said as he arrived for the summit. "We would have wished for more far-reaching progress yesterday evening."
Despite the uncertainty, the euro held ground against the dollar on Thursday and Greek stocks were up 4.25 percent.
With Greece weary of the painful austerity imposed with a series of bailouts since 2010, more than 15,000 people turned out on the streets of Athens on Wednesday in a show of support for the government.
The bailout negotiations are the latest stage in a long-running crisis over Greece`s huge debts, run up during years of overspending including the 2004 Athens Olympics.
If the EU is unwilling to help, Greece has suggested that it could look to Russia or China.