Merkel and French President Francois Hollande worked together on a plan to save Greece from plunging into economic turmoil and possibly having to ditch the euro. This involved a medium-term conditional program and a short-term interim financing deal for a few months, the sources said.
However, a solution still depends on Tsipras putting forward convincing reform proposals and rushing key measures through parliament by the weekend to make Greece's public finances sustainable.
Now Tsirpras can look like a hero by agreeing to whatever watered down reforms and then the banks can reopen and people can live off of more than 50 Euros a day. It does pretty much invalidate that Greek vote but a crisis is still a crisis. This part was especially optimistic.
Merkel said she expected a formal loan request from Athens on Wednesday and more detail on how Greece would cooperate to make its economy more competitive on Thursday, in order to seek the approval of the German parliament to start negotiations.
I mean endless austerity that crushes the Greek economy will just put us back at this same spot 6 months from now. Growing out of the debt might be a way for the problem to be fixed permanently.