An admission by French President, Nicolas Sarkozy, that Berlin and Paris were divided over how to make the eurozone bailout fund more effective had already dented hopes that Sunday's EU summit would bring substantial progress.
The IMF rated EU projections for Greece's debt as too optimistic and wanted to delay approval of the next aid tranche further complicated the picture. The fund wants to wait until after this weekend's summit to see if discussions produce a clearer picture, EU officials said.
Without an €8 billion loan payment from the EU and IMF next month, Greece faces default, possibly dragging the larger economies of Spain and Italy into the mire and sending shockwaves through the banking system.
Seeking a comprehensive plan, eurozone leaders are racing to agree new steps to reduce Greece's debt, strengthen the capital of banks with exposure to troubled eurozone sovereigns, and leverage the eurozone's rescue fund to stem contagion to bigger economies.
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