Greece faces temporary exit from eurozone in case of no deal

Eurozone leaders have reportedly presented a 'draconian' bundle of austerity measures before Greece that will entail a surrender of fiscal sovereignty to avoid economic collapse and a possible exit from the currency bloc.

A weekend of high tension culminated on Sunday night at a eurozone summit in Brussels where German Chancellor Angela Merkel and France's President Francois Hollande issued an ultimatum to debt-ridden Greece, reported The Guardian.

A four-page document produced at the end of two days of high-stake talks included the 'controversial' German elements leaked on Saturday. One of the options on the table before Greece is to exit the eurozone temporarily and take a 'time-out' from the currency bloc if it refuses to accept the terms for the new bailout or in the event of an agreement, it should set aside assets worth 50 billion euros as collateral for new loans and for eventual privatisation.

However, both proposals failed to garner a consensus among eurozone leaders.

Under the terms presented before Greece's Prime Minister Alexis Tsipras on Sunday night, the parliament will have to endorse the entire bailout package on Monday and pass several pieces of legislation by Wednesday, including on pensions reform and a new VAT regime, before the eurozone agrees to negotiate a new three-year bailout deal.

The document also stipulated that experts from the International Monetary Fund, European Commission and European Central Bank will be there on the ground in Athens to monitor the proposed bailout programme and will also have a say in all relevant draft legislations before they are presented before the Greek parliament. Also, the debt-ridden country will have to amend all legislations already passed by the ruling Syriza party this year that had not been agreed with the creditors.

The terms put forward by the creditors are stricter than the ones snubbed by Greece in the recent referendum.

A senior official dubbed the new conditions as a 'payback' for the emphatic 'No' delivered by Greeks during the 'snap referendum' staged by Tsipras.