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The European Central Bank has thrown Greece a lifeline to prevent Athens running out of money before crunch talks with European leaders.  The extension of emergency funding to the Greek finance sector by the eurozone’s central bankers lifted the euro and gave Greece’s prime minister, Alexis Tsipras, a stronger hand before meetings with senior officials at the leaders summit in Brussels.

Tsipras was scheduled to meet the German chancellor, Angela Merkel, in an attempt to hammer out a deal after he told her, following his election a little more than a fortnight ago, that he will lift draconian austerity measures, contravening the terms of the Greek bailout programme.  Greece has failed so far to persuade European leaders that it needs more generous loan financing to alleviate poverty and to promote growth. Talks earlier his week between eurozone finance ministers reached a deadlock after plans put forward by Athens for cheaper long-term loans were rejected...The ECB has come under pressure to allow Greece to access short-term lending facilities after it said the crisis-hit country no longer qualified for drawing on standard borrowing terms. ECB officials declined to comment, but two sources familiar with the matter told Reuters that the provision of emergency liquidity assistance (ELA) by the Greek central bank would be authorized by the ECB as a temporary expedient...  Merkel was scheduled to meet Tsipras privately on the sidelines of the one-day informal EU summit, which was meant to focus mainly on the Ukraine crisis and report back on negotiations in Minsk with the Russian president, Vladimir Putin.   Tsipras’s position appeared to weaken before the summit after figures showed a shortfall in Greek tax receipts and a steady flight of savings from the country’s largest commercial banks. Finance ministry data showed tax revenues were €3.49bn (£2.58bn) in January, well below the €4.54bn target set under Greece’s latest budget.  The grim data adds to concerns that Greece will run out of time and money before settling differences with European partners, who want Athens to stick with a debt plan that expires at the end of this month.  Greek households withheld tax payments desperately needed by the new Athens government after it rejected the last payment worth €7.2bn under the existing bailout scheme.   Greek banks have also been hit by a flight of capital to foreign-owned rivals in the runup to snap elections, which propelled Tsipras’s radical left party Syriza to the head of a coalition.