Euro Mess: Inside the Fight Between Greece and EU Leaders

Some of Europe's most powerful money leaders said that the ball is in Greece's court to prevent a nationwide catastrophe.

The Eurogroup, comprised of the ministers of the euro area member states, said at the end of their meeting today that they are waiting for a letter from Greece with a new financing proposal.

"In the mind of the Eurogroup, the problems of Greece really do need credible reforms to deal with those problems," said Eurogroup president and Dutch finance minister Jeroen Dijsselbloem to reporters. "Therefore, we need to hear from the Greek government to hear if they have such reforms in mind. ... That's what we will hear very, very soon."

Greece has at least two ticking time bombs: An immediate need for financing for its cash crunch and the July 20 deadline when the country is due to pay 3.5 billion euros to the European Central Bank.

As Eurozone leaders also meet today for an emergency summit, Greece's creditors and the country's leadership still disagree on a handful of major issues. The Eurozone monetary union includes 19 of the 28 European Union member states that have adopted the euro as their currency.

Here are some of the major sticking points between Greece and its creditors:

1. How much spending to cut?The leftist Greek government has been reluctant to cut public expenditures and the biggest hurdle is pension spending.

"Greeks want to keep early retirement for older workers for as long as possible," Ted Loch-Temzelides, economist with Rice University, said. "They propose an increase in contributions, rather than a decrease in benefits."

Greeks have recently called for 5 percent contributions toward pensions while creditors want 6 percent, as well as less benefits.

Greece spent 17.5 percent of its economic output on pension payments, the most in the E.U., according to the most recent Eurostat data from 2012. But with existing cuts, that figure has fallen to 16 percent, Reuters reported. Italy, France and Austria each spent about 15 percent of their GDP on pensions in 2012, according to Eurostat.

2. Raising taxesGreeks intend to raise the corporate income tax, "a business-unfriendly move," Loch-Temzelides said, while the creditors prefer an increase in the value-added tax, or VAT, paid mainly by consumers.

Greeks intend to the raise corporate income tax rate from 26 to 29 percent while the creditors favor a smaller increase. Europeans have proposed a one percent increase in the VAT, and Greeks favor three-quarters that.

3. Military spendingThe European creditors want a sharp cut in military expenses, which the Greeks resist, Loch-Temzelides said. Creditors have called for an approximate 400 million cut in military spending compared to the 200 million or so cuts favored by Greeks.

4. Debt: Forgive or forget?"And of course, there is the issue of debt forgiveness," Loch-Temzelides said. "The two sides obviously disagree about how much of its debt Greece should be paying back."

Greee's debts include the 1.5 billion euros that the country failed to pay last month to the International Monetary Fund and the 3.5 billion euros in bond redemptions for securities held by the European Central Bank, due July 20.

Meanwhile, many Greeks are unable to access cash from banks. In Prime Minister Alexis Tspiras' letter dated June 30 before Sunday's referendum, he asked for a two-year loan from the European Stability Mechanism, which Bloomberg describes as the euro area's firewall fund, to help with the cash shortage.

"There is a great sense of urgency," Dijsselbloem said today. "We all share it. The Greek colleagues share it. We share it. ... Time is very short and more so as we go on."