By Josie Cox

European stocks steadied Tuesday, with investors awaiting the outcome of an impromptu summit of eurozone leaders at which Greece will once again face its European creditors.

In early trade, the Stoxx Europe 600 was 0.3% higher. Germany's DAX 30 rose 0.4% and France's CAC 40 was 0.1% higher. In southern Europe, Italy's FTSE MIB rose 0.7% and Spain's IBEX 25 added 0.2%.

Moves in debt markets were muted too.

The yield on Germany's 10-year benchmark bond was at 0.75%, around 2 basis points lower on the day. Yields fall as bond prices rise and a strong bid for assets considered safest during times of stress has supported German debt in recent days.

The yield on Italian 10-year debt was at 2.5%, steady on the day. The yield on 10-year Spanish debt was at 2.35%, also broadly unchanged.

The euro dropped 0.8% to $1.0968, losing grip on $1.10.

Read: Greek debt crisis: Who's meeting and when on Tuesday (http://www.marketwatch.com/story/greek-debt-crisis-whos-meeting-and-when-on-tuesday-2015-07-07)

On Monday, the European Central Bank raised the pressure on Greek banks by forcing them to post more collateral (http://www.marketwatch.com/story/ecb-raises-pressure-on-greek-banks-2015-07-07) for emergency central bank loans they depend on for survival, while also maintaining a ceiling on the amount of the loans that have been in place for more than a week.

"This effectively makes it harder for Greece's banks to access emergency loans," Credit Suisse economists wrote in a note.

That decision came after Greeks on Sunday voted overwhelmingly to reject demands (http://www.marketwatch.com/story/in-rebuke-to-europe-greeks-vote-resounding-no-to-bailout-terms-2015-07-05) for economic overhauls and fiscal cuts made late last month by the country's international lenders.

Without a fresh inflow of funds, Athens will have trouble paying its bills and may default on a critical EUR3.5 billion ($3.9 billion) payment owed to the ECB on July 20 to redeem Greek government bonds held by the central bank.

"We are currently in a classic stalemate," Jim Reid, senior strategist at Deutsche Bank, wrote in a note. Citigroup economists, however, also noted "the scope for significant market contagion should continue to be limited."

Giordano Lombardo, chief executive officer and group chief investment officer of Pioneer Investments, said that he thinks it is still too early to take any "drastic action."

"The next few days will provide a clearer picture as to how this Greek drama will unfold, but we reiterate the fact that volatility will remain extremely high and news-dependent," he said.

"We suggest maintaining a cautious posture across all asset classes."

The head of Greece's banking association said banks would remain closed through Wednesday; few expect them to open soon after that.

They were closed all of last week, as was the country's main stock exchange .

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