BRUSSELS — Eurozone finance ministers broke off talks on Monday without an agreement on Greece's bailout, saying they aim to reach a deal later this week that might keep the country from defaulting and falling out of the currency union.
The lack of a result leaves a summit of government leaders later in the day with few prospects of making any concrete decisions on the country's crisis.
Greece needs more loans from its creditors, which include its fellow eurozone states and the International Monetary Fund, in time for June 30, when it faces a debt repayment it cannot afford. The country has been negotiating for four months what economic reforms it should make to get the money.
Ahead of the meetings in Brussels, German Chancellor Angela Merkel and other European officials had warned against expecting too much on Monday. Markets had rallied strongly in the morning on hopes that new proposals for reforms submitted by the Greek government over the weekend would pave the way for a deal.
Those gains faded somewhat as it became clear that a deal would have to wait a little longer yet. After trading 8 percent higher earlier, the main Greek stock index was up about 5 percent. The Stoxx 50 index of major European shares was up 2.9 percent.
European Union leaders have a two-day summit starting Thursday and hopes are a full agreement can be reached then.
Jeroen Dijsselbloem, the Dutchman who heads the eurozone finance minister meetings, said negotiators would be using proposals made this weekend by Greek Prime Minister Alexis Tsipras as a basis for further talks. "It's an opportunity to get that deal this week," he said.
European Commission President Jean-Claude Juncker said Greece's new proposals were a sign of progress but warned that "we are not yet there."
No details of the proposals were made public.
Despite the upbeat mood in markets, 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.
"Everyone's going (to the banks) to take money," said Yannis Nikolopoulos in Athens. He said people are taking "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."
To support Greek banks in the face of growing money withdrawals, the European Central Bank increased Monday the amount of emergency credit it allows the banks to draw on, a banking official said.
The official, who spoke only on condition of anonymity because the 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.
Reports indicate Greeks withdrew about 4 billion euros last week.
An exit from the euro would be hugely painful for Greeks, plunging the country back into a deep and long recession. Experts are more divided about its effects on Europe and the world economy. Some say it would be manageable, but others note there is huge uncertainty. Several European countries have said publicly they are getting prepared for such an eventuality.
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.
Since coming to power in January, the new government has refused to make more budget austerity measures, which it blames for devastating the economy. It has since softened its approach, but it remains reluctant to take the steps creditors demand.
Over the past weeks, the creditors have often complained that Greek proposals on what kind of reforms they would implement have been too slow to come and far too vague.
German Finance Minister Wolfgang Schaeuble said Monday that despite the new Greek plan, "we have so far received no substantive proposals."
"That is why we are unable to provide adequate preparation" for Monday night's summit, he said.
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.
Nathalie Savaricas in Athens contributed to this report.