BRUSSELS - Greek Prime Minister Alexis Tsipras will address the European Parliament on Wednesday after European leaders gave his debt-stricken country a final deadline to reach a new bailout deal and avoid crashing out of the euro.
Greek leaders must submit detailed reform plans by Thursday to win the fresh bailout funds the country needs to stop its banking system from collapsing, EU President Donald Tusk said after an emergency summit of Greek and eurozone leaders on Tuesday.
All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will either rescue Greece's moribund economy, or leave it to crash out of the single currency - a so-called "Grexit".
"Tonight I have to say loud and clear - the final deadline ends this week," Tusk told a news conference.
"Inability to find an agreement may lead to bankruptcy of Greece and insolvency of its banking system," he added.
The urgency of the situation was underlined by the head of France's central bank, Christian Noyer, who said Wednesday he feared Greece could descend into "chaos" unless a deal was struck this week.
"The Greek economy is on the edge of catastrophe. A deal absolutely must be found on Sunday because it will be too late after that and the consequences will be serious," he told French radio, adding that "there could be riots... and chaos in the country".
Greek banks remain closed for a second week, with ATM withdrawals limited to 60 euros a day.
Noyer said it was "impossible" to re-open the banks while confidence was so low because there would be an "immediate run" on tellers.
The EU's Economic Affairs Commissioner Pierre Moscovici said an agreement with Greece was possible but it was up to its government to make credible proposals to its fellow eurozone members.
"I think a solution must be found by Sunday and I believe it can be," he told France 2 TV, adding: "The ball is clearly in the Greek authorities' court." The eurozone had expected Greece's newly appointed finance minister, Euclid Tsakalotos, to submit new reform plans on Tuesday after Greeks voted in a referendum Sunday to reject creditor demands for more austerity in return for fresh EU-IMF bailout funds.
When the proposals were pushed further into the week, European Commission President Jean-Claude Juncker warned "we have a 'Grexit' scenario prepared in detail" if no deal is reached, although he insisted he wanted Athens to stay in the single currency.
German Chancellor Angela Merkel, meanwhile, warned Greece would need a debt programme lasting "several years" to revive its moribund economy and insisted writing off any part of its 320-billion-euro ($350-billion) debt mountain was out of the question.
The prime minister is expected to tell European parliamentarians in Strasbourg that Sunday's referendum result gave him a strong new mandate from his beleaguered people.
Speaking in Brussels on Tuesday, he said the Greek government "continues its efforts with the people's mandate as a weapon, and its desire for a viable agreement that brings an end to this story and guarantees an exit from the crisis".
Greece to make 'efforts'
The referendum result was seen as a victory for Tsipras, who came to power in January vowing to end five years of bailout-imposed austerity blamed for crashing the Greek economy, which has shrunk by a quarter since the crisis started.
But the result dismayed other EU leaders, rocked world financial markets and dealt a blow to the post-war vision of European integration, already reeling from years of economic crisis.
In Athens, the Greek government said it had committed to seeking its third bailout since 2010, with a revised request "taking into account" the concerns of creditors who have demanded more cuts to pensions and the introduction of higher taxes.
Tsakalotos - who replaced outspoken Yanis Varoufakis after he resigned on Monday to ease the rift with Athens's creditors - told reporters there had been "progress" at Tuesday's talks.
But their words did little to dispel the fear gripping world financial markets, with Asian shares plunging on Wednesday morning and the euro hitting a five-week low of $1.0916 in New York trading on Tuesday.