An option floated by 18 European leaders late Sunday would force Greece to take a five-year "time-out" from the eurozone if the country does not enact a series of tough reforms.
The eurozone leaders proposed several reforms for the country in a four-page document late Sunday, the result of two days of frantic talks, the BBC reports. The document suggests if a bailout is not agreed, there should be "swift negotiations on a time-out from the euro area, with possible debt restructuring."
One Greek government official called the proposals "very bad," the BBC reports, while another unnamed official said the proposals seemed designed to "humiliate" the Greek Prime Minister Alexis Tsipras and his left-wing Syriza government.
The measures the eurozone leaders proposed include the stipulation that Greece's parliament must ratify the reforms by Wednesday, July 15. The country must make "ambitious" reforms to its pensions and labor markets, and allow international creditors to have full oversight of draft legislation on the ground in Athens. "Valuable" Greek assets worth 50 billion euros could be transferred outside the country and sold to pay down the debt under the proposed plan.
One diplomat said that was tantamount to turning Greece into a "German protectorate," Reuters reported.
France's President Francois Hollande downplayed the idea of a "time-out" late Sunday saying: "There is no temporary Grexit, there is a Grexit or there is not a Grexit."
"I'm here ready for an honest compromise... we can reach an agreement tonight if all parties want it," said Greece's president Tspiras.
Even if somehow the Greek parliament is able to swallow all the proposed reforms and pass them by Wednesday, Athens must allow its creditors to monitor its implementation and to agree on any draft laws in advance, something that Syriza came to power promising to end, reports the BBC. Accepting this deal from Europe would be a humiliating defeat.
Additionally, under the proposal eurozone leaders floated Sunday, any laws Syriza passes that are counter to what had been agreed in February could be amended or compensated for, meaning that 4,000 reinstated civil servants would lose their jobs, according to the BBC.
If Greece refuses to agree to this proposal the alternative is a "time-out" from the eurozone. Leaving the eurozone would allow Greece the chance to devalue its currency and restructure its debt.
"The most important currency has been lost and that is trust," German president Angela Merkel told reporters. "That means that we will have tough discussions and there will be no agreement at any price."