Markets surge ahead of last-ditch summit on Greece

BRUSSELS - Markets surged on hopes for a breakthrough at a summit to be held Monday to keep Greece from defaulting and falling out of the currency union. A top European Union official, however, cautioned against excessive optimism.

With Greece facing the risk of defaulting on its debt as soon as next week, the country and its creditors are holding an emergency meeting to find an agreement on the conditions for more loans.

The talks have dragged on for months and are reaching a breaking point, with the country facing a debt repayment on June 30 it cannot afford without more loans. Worried Greeks, meanwhile, are pulling money out of banks in growing amounts.

Ahead of the meeting, Greek Prime Minister Alexis Tsipras made new proposals on what economic reforms and cuts his country would accept in exchange for the loans.

European Commission President Jean-Claude Juncker acknowledged that the proposals were a sign of progress but warned that "we are not yet there."

Heading into a meeting with International Monetary Fund, the European Central Bank and EU leaders, Tsipras said that after four months of slow and unsuccessful negotiations that put the global financial system on edge it was "time for a substantial and viable solution."

No details of the proposal were made public, but investors were hopeful that it represented a long-awaited compromise. The Athens stock index was up 8.2 percent while Stoxx 50 of top European shares was 3.1 percent higher.

Despite the market rally, tension was palpable in Greece, where people flocked to cash machines to withdraw money. The concern is that a debt default by Greece could destabilize the country enough that it might have to eventually leave the euro.

To support Greek banks in the face of growing money withdrawals, the European Central Bank increased the amount of emergency credit it allows the banks to draw on to remain afloat, a banking official said.

The official, who spoke only on condition of anonymity because the ECB decision had not been made public, said the ECB remains on call in the coming hours and days to revise the amount of credit to Greek banks, should that be necessary

Reports Greeks withdrew about 4 billion euros last week.

"Everyone's going (to the banks) to take money," Yannis Nikolopoulos said in Athens. He said people are taking "some money to have at home for 10, 15 days - say 1,000, 500 euros - because if the banks shut it'll be a problem to go shopping and that sort of thing."

He said that a deal between Greece and its creditors "is mandatory at all costs, otherwise we're doomed."

Vassiliki Papanagiotou, a lawyer in Athens, urged "prudence on both sides," warning that "otherwise Greece will collapse."

Greece has a debt repayment on June 30 worth 1.6 billion euros that it cannot afford without more loans. The talks are currently about releasing the last 7.2 billion euros in the country's bailout program, which expires at the end of the month.

Over the past weeks, the international creditors have often complained that detailed Greek proposals on what kind of reforms they would implement to secure the international bailout have been too slow to come and far too vague.

Since coming to power in January, the new government has refused to make more budget austerity measures, which it blames for devastating the economy.

Before leaders gather on Monday evening, eurozone finance ministers will also gather in Brussels to pore over the details of Greece's proposal and confirm whether it meets the demands of creditors.

About 5,000 people attended a pro-government rally in central Athens Sunday night. Pro-EU forces will gather Monday evening outside the Greek Parliament.