Greece debt crisis: Merkel says talks 'extremely difficult'

Germany's Chancellor Angela Merkel has called the talks on Greece's debt rescue "extremely difficult" and ruled out "agreement at any price".

She was speaking as she arrived in Brussels for a meeting of the other 18 eurozone leaders to discuss the deal.

Soon after the summit started, it was suspended to enable sideline talks with the Greek prime minister.

Greece risks being ejected from the eurozone if a deal to rescue it from financial collapse is not reached.

The eurozone leaders are considering a document of proposals, put together by finance ministers after two days of intense negotiations, which would impose new tough conditions on Athens.

Finnish Finance Minister Alex Stubb said one condition in the ministers' proposal requires Greece to implement new laws by Wednesday.

Greece will also be required to introduce tough conditions on labour reform, VAT and taxes, and tough measures on privatisation and privatisation funds, Mr Stubb told reporters.

The head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said a "couple of big issues" remain which would be left to the heads of government to rule on, though he did not give details.

Mrs Merkel told reporters before the meeting that the leaders would be considering whether "the conditions are met" to start negotiations on a third bailout.

"That's what is at stake, nothing more and nothing less," she said.

But she warned that there would be "no agreement at any price", adding: "We have to make sure the pros outweigh the cons - for Greece's future, for the entire eurozone and the principles of our collaboration."

Mr Tsipras was more upbeat, telling reporters: "I'm here ready for an honest compromise... we can reach an agreement tonight if all parties want it."

The head of the European Parliament, Martin Schulz, said the future of Europe, not just Greece, was at stake if an agreement was not reached by the end of Sunday.

"The alternative will be that over the next few years we are going to find ourselves in a catastrophic state of affairs as far as Greece is concerned," he told a news conference in Brussels.