Germany has drawn up plans for a temporary five-year Greek exit from the euro if it fails to improve its bailout proposals, a European source told AFP Saturday as eurozone finance ministers met in Brussels.

"It's an internal paper, it was not distributed today (at the eurozone meeting). There were two options: an improvement of the proposals, or temporary 'Grexit'," said the source, who had seen the paper.

Hardline Germany is leading a chorus of skepticism as eurozone finance ministers study leftist Greek Prime Minister Alexis Tsipras's new reform plan for a third rescue package worth more than 80 billion euros ($89 billion).

The European source was commenting on a report in the Frankfurter Allgemeine Sonntagszeitung newspaper that said the plans appeared in a one-page German finance ministry "position paper" which was handed to other member states.

The new Greek proposals for a third bailout "lack areas of important reforms," which is why they cannot serve as the basis for a new three-year bailout program, the ministry reportedly said.

It urged Greece to quickly improve its reform proposals and seek parliamentary support for a fund to sell 50 billion euros in financial instruments to reduce the debt burden.

If not, the paper said, Greece should leave the 19-country eurozone for at least five years and restructure its debt while remaining a member of the 28-nation European Union and receiving humanitarian aid and other support.

Meanwhile, eurozone finance ministers gathered in Brussels on Saturday to decide whether to negotiate a third bailout for Greece or not.

Germany's Finance Minister Wolfgang Schaeuble said the talks would be "extremely difficult".

Eurogroup chief Jeroen Dijsselbloem spoke of a "major issue of trust" over Greece's resolve to implement reform.

EU officials forecast agreement would be reached by the end of the weekend to keep Greece afloat. And Greece's economy minister appeared confident that a deal would be done "in the next 24 hours". "There are certain improvements compared to the proposal that was on offer before the referendum," Mr Stathakis told the media. "The main one is debt restructuring."