The Latest: European Central Bank keeps its level of emergency credit to Greek banks unchanged

ATHENS, Greece – The latest on the fallout from the Greek referendum (all times local):


9:05 p.m.

The European Central Bank says it is keeping the level of emergency credit to Greek banks unchanged, leaving the banks under increasing pressure as they try to cope with cash withdrawals.

The ECB says in a statement that the credit “can only be provided against sufficient collateral.” That collateral has been weakened due to the worsening financial situation of Greece.

The decision leaves the Greek banks in a stranglehold, as they struggle to replenish cash machines in the coming days.

The ECB says it is monitoring the situation in the financial markets closely and is ready to use all available measures to keep stability in the 19-nation eurozone.


8:45 p.m.

The leaders of Germany and France say they respect Greece’s vote against the terms of an international bailout, and added the door remains open to negotiations with the Greek government to find a way to keep the country in the 19-country eurozone.

German Chancellor Angela Merkel stressed the importance of Greece taking “responsibility” for reforming its economy, while French President Francois Hollande said it is important for Europe to show “solidarity” with Greece. The two leaders run the eurozone’s largest economies.

The two leaders met in Paris on Monday. Their brief statement sets the tone for an emergency summit Tuesday in Brussels of the eurozone’s 19 national leaders.

Both stressed the urgency of coming to a decision on a solution to Greece’s financial woes, with Merkel demanding proposals from Greece’s prime minister this week.


7:40 p.m.

Credit ratings agency Fitch says Greece’s ‘no’ vote in Sunday’s austerity referendum “dramatically increases” the risk of the country leaving the eurozone.

Fitch said a deal between Greece and its creditors remains possible but that there’s little time. The agency said the resignation of Finance Minister Yanis Varoufakis signals the Greek government’s desire to again start talking with its creditors.

It said creditors could make stronger commitments on easing Greece’s huge debt but were unlikely to make big concessions on austerity measures. In addition, Fitch said the European Central Bank may find a way to provide hobbled Greek banks with additional liquidity while negotiations continued.

Markets steadied on the news of Varoufakis’ resignation to not register further falls. Germany’s DAX ended 1.5 per cent lower, while the euro was up 0.8 per cent on the day just below $1.11.


7:25 p.m.

A top Greek official says the government is “moving immediately”” to reach a deal with its creditors “as soon as possible” in order to stave off economic collapse.

Government spokesman Gabriel Sakellaridis said Greek Prime Minister Alexis Tsipras has sought support from all political party leaders and that the government is “fully aware of how crucial the situation is.”

Tsipras met with rival party leaders a day after Greeks soundly rejected a proposal by creditors for more austerity measures in exchange for rescue money.

Sakellaridis said the leaders couldn’t ignore the people’s message for a viable deal that would be fair to the poor, deal with Greece’s massive debt and restore liquidity to the hobbled banking system.


7:20 p.m.

German Chancellor Angela Merkel has arrived at the Elysee Palace for talks with French President Francois Hollande about the Greek crisis.

Hollande gave her a friendly greeting in the courtyard before heading for the meeting, which comes a day ahead of an emergency summit of the eurozone’s 19 leaders on Greece.

The two are expected to issue a joint statement before the dinner that’s likely to reflect the line to be taken at the summit. France has appeared more conciliatory than Germany toward Greece over the past few months of protracted bailout discussions.


7:05 p.m.

German Finance Minister Wolfgang Schaeuble says he had “no personal problems” with Yanis Varoufakis, who earlier quit as Greece’s finance minister despite the overwhelming ‘no’ vote in Sunday’s referendum on creditor proposals.

At a press briefing in Warsaw, Poland, Schaeuble said he, and other finance ministers in the 19-country eurozone, were “not of the same opinion” on many points with Varoufakis whose resignation triggered hopes that the Greek government will be more conciliatory in discussions Tuesday in Brussels.

Prime Minister Alexis Tsipras and the new finance minister, Euclid Tsakalotos are expected to provide fresh proposals to European creditors.

Schaeuble said Varoufakis’ successor “will be in the not-simple situation of finding a solution with his colleagues in the eurogroup to not-simple problems.”


6:50 p.m.

Britain’s Treasury chief has urged British tourists headed to Greece to take enough cash and prescription medicines to cover their trip.

George Osborne says “the situation risks going from bad to worse” and that “Britain will be affected the longer the Greek crisis lasts and the worse it gets.”

He said the chances of a positive resolution to Greece’s debt crisis are “sadly diminishing” after Greek voters’ rejection of recent creditor proposals and that the economic situation in Greece will deteriorate quickly without a new push for stability.

Osborne also said several thousand U.K. citizens in Greece will continue to be paid their pensions.


6:40 p.m.

Cuban President Raul Castro has sent a congratulatory message to Greek Prime Minister Alexis Tsipras saying the overwhelming ‘no’ result in Sunday’s referendum on creditor proposals ratifies the Greece government’s approach.

“That result demonstrates the majority support by the Greek people of the courageous policy of the government you lead,” he said in a note published on the front page of official newspapers Monday and dated July 5.


6:30 p.m.

The Greek government has named Euclid Tsakalotos as the country’s new finance minister, a day ahead of an emergency meeting with creditors in Brussels.

The 55-year-old economist was Prime Minister Alexis Tsipras’ lead bailout negotiator in talks that halted last month before Tsipras called a bailout referendum. In that referendum, Greeks overwhelmingly voted against recent creditor proposals required for bailout cash.

Tsakalotos replaces fellow-economist Yanis Varoufakis who quit earlier Monday, saying his departure would help bailout negotiations reach an agreement.


5:45 p.m.

Christine Lagarde, managing director of the International Monetary Fund, says the fund stands “ready to assist Greece if requested to do so.”

Her statement Monday was the IMF’s first reaction to Greek voters’ decisive rejection of further austerity measures in return for bailout loans.

“We are monitoring the situation closely,” she said, without offering further details.

Greece is in arrears to the IMF, having failed to pay a 1.5 billion-euro ($1.7 billion) loan due last Tuesday. The IMF said it couldn’t get involved in a further bailout of Greece if the country remained in arrears.

The IMF last week also said that Greece would need debt relief as well as new financing worth more than 60 billion euros through 2018 to avoid financial collapse.


5:25 p.m.

On the streets of Athens, Greeks are proud of their toughness and defiance after Sunday’s landslide “no” vote against creditors’ demands — but they acknowledge there’s still plenty to worry about.

George Papadokostakis, a 34-year-old coffee shop owner, says he’s very happy with the referendum result. He says “something happened last night with the Greek people. … we were in a dead-end situation (but) with the ‘no’ vote we believe there may be something better.”

Shoe store worker Nicky Zachary thinks Greeks are tough and united in rejecting austerity.

She says “we can live with very little and we can live through difficult situations. And I think after the referendum, the Greek people are united.”

“I don’t know what will happen next. I would like to have an answer. But at least we are fighting,” she added.


5:05 p.m.

Greece’s defence minister says three opposition parties have signed a declaration backing Prime Minister Alexis Tsipras in bailout negotiations with creditors.

That makes a total of five parties behind the prime minister, who already had the support of his own Syriza party and the junior party in the governing coalition, the Independent Greeks.

Defence Minister Panos Kammenos said the support heralded a “new era” in Greek politics and would boost Athens’ chances of reaching a deal with European and international creditors.


4:15 p.m.

Greek Prime Minister Alexis Tsipras has spoken on the telephone with German Chancellor Angela Merkel, a day after Greece overwhelmingly voted against recent creditor proposals and on the eve of an emergency eurozone leaders’ summit.

A government official in Athens said Tsipras told Merkel that he would present Greece’s proposals to restart talks with creditors at the Brussels meetings.

The official asked not to be named pending an official announcement.

Talks between Athens and bailout lenders were halted during the referendum campaign.


3:55 p.m.

Germany’s vice chancellor says Europe needs to be ready to provide humanitarian aid to Greece

Sigmar Gabriel, who is also Germany’s economy minister, said there is a danger that Greece will suffer a shortage of essential goods such as medicine.

“The people there need help, and we shouldn’t deny it to them just because we’re not satisfied with the outcome of the referendum,” Gabriel told reporters in Berlin.


3:40 p.m.

Greece’s economy minister says the European Central Bank should keep Greek banks alive so talks can push ahead with creditors.

Giorgos Stathakis told the BBC that even if the ECB continues to freeze Emergency Liquidity Assistance, current cash withdrawal and transfer restrictions could stay in place until Friday without any collapse. He said the best-case scenario would be an additional 3 billion euros ($3.3 billion) in liquidity assistance.

Capital controls were imposed last week in the wake of the failure of the country to forge a new deal with creditors.


3:15 p.m.

The Kremlin says Russian President Vladimir Putin received a phone call from Greek Prime Minister Alexis Tsipras, whose government is racing against the clock to reach a bailout deal with creditors.

The two leaders discussed the results of Sunday’s referendum in Greece and “several questions about the further development of Russian-Greek co-operation,” the Kremlin said.

During Monday’s call, the Kremlin said Putin “expressed support for the Greek people in overcoming the difficulties facing their country.”


3.00 p.m.

The eurozone’s top official says he wants Greece to stay in the euro.

Jeroen Dijsselbloem, who is also the Dutch finance minister, also says the Greeks want the same.

“That is their goal, and still mine,” he said on his way into a Dutch Cabinet meeting Monday in The Hague. “But we will have to see if it happens.”

Asked if it was still worth talking with the Greeks after the referendum, Dijsselbloem said: “We will see. We are going to see in the coming days if there are still openings. But there are no easy solutions.”


2:45 p.m.

The Greek referendum result is giving heart to anti-austerity parties in other countries.

Portugal’s main opposition Socialist Party, which will bid for power in elections due in three months’ time, says Greece’s troubles show that a new approach is needed to the eurozone’s financial difficulties.

Socialist leader Antonio Costa said austerity policies are “wrong” and endanger European unity. A new focus on growth is needed to rid the eurozone of the deep economic differences between its 19 members, he said.

Like Greece, Portugal got a bailout, when it asked for 78 billion ($86 billion) in 2011. Spending cuts and tax hikes have reduced its budget deficit but have increased unemployment and reduced living standards.

Portugal’s centre-right coalition government, which has staked its reputation on austerity policies to reduce the country’s huge debt burden, made no comment.


1:25 p.m.

The German Finance Ministry says a reduction in Greece’s debt mountain isn’t on Germany’s agenda. Ministry spokesman Martin Jaeger said “our position is well-known … a debt cut is not an issue for us.”

He said there were no grounds for a debt restructuring given that Greece has yet to set out fresh proposals for financial aid.


1:05 p.m.

German officials are insisting that Greece can only hope to receive aid from the eurozone’s rescue fund if it accepts conditions in return.

Finance Ministry spokesman Martin Jaeger said Monday the rules underpinning the fund, the European Stability Mechanism, clearly specify that all aid is subject to conditions.

He said that “it is simply not legally possible to back away from this principle.”


12:55 p.m.

Spanish Economy Minister Luis de Guindos said his government is ready to talk about a third Greek bailout.

De Guindos told reporters in Madrid after the government’s economic team met to discuss Greece’s referendum result that everyone wants Greece to “stay in the euro.”

“I don’t contemplate in any way Greece leaving the euro,” he said.

The minister conceded the situation now was probably the most complex since the euro launched in 1999 but that the currency’s irreversibility would be reaffirmed Tuesday at the meeting of eurozone finance ministers.


12:45 p.m.

Chancellor Angela Merkel’s spokesman says Germany sees no basis at present for entering negotiations on a new bailout program for Greece, but that the door remains open.

Steffen Seibert said Monday that Germany respects the “clear ‘no’ vote” by Greeks against austerity measures demanded by creditors and that “the door for talks always remains open.”

However, he said the conditions are “not there at present to enter negotiations on a new program.” He said the “no” vote is a vote against the principle — still supported by Germany — that solidarity requires countries to take responsibility.


12:30 p.m.

French Finance Minister Michel Sapin said discussions over Greece’s debt sustainability are not “taboo” and that the country could not recover given its current repayment obligations “in the months and years to come.”

He also called for the European Central Bank to maintain liquidity assistance to Greek banks. French and German leaders are meeting late Monday for a “deep conversation” leading to a solution, Sapin told Europe 1 radio. France has through the last few months been one of the most conciliatory eurozone countries towards Greece.


12:15 p.m.

Greece’s employment minister is signalling a conciliatory tone in upcoming talks with European leaders, suggesting that leaving the eurozone would be the worst possible option for the beleaguered country.

Rania Antonopoulos told the BBC there is still time to get a deal. With Greece’s future hanging in the balance, the country is running out of cash and is at risk of a financial crash.

“There are still 48 hours, there is still this week,” said Antonopoulos. “We will push as much as possible for an outcome, a result of these negotiations that does not obligate Greece to go in that direction.”


11:55 a.m.

Cyprus says it has been the only bailed-out country in the 19-country eurozone to support Greece’s demand for restructuring its massive debt.

Government spokesman Nicos Christodoulides has told state radio that Cyprus’ president and finance minister backed a restructuring of Greek debt and negotiations between Greece and its creditors need to begin immediately.


11:45 a.m.

Finland’s finance minister says Greece will need to conduct extensive reforms no matter what happens next and says “the ball is now in Greece’s court.”

Alexander Stubb said on his website that’s it up to the Greek government to decide what Sunday’s referendum vote against creditors’ previous proposals means in practice. He stressed that “the instruments and rules for the stabilization of the eurozone remain unchanged” and that “negotiations can only be resumed when the Greek government is willing to co-operate and commit itself to measures to stabilize the country’s public economy.”


11:36 a.m.

European stock markets trimmed earlier losses after Greek Finance Minister Yanis Varoufakis said he was quitting his post despite the overwhelming ‘no’ vote in the country’s referendum on creditor proposals on Sunday.

After opening sharply lower, European stock markets recovered some ground on the news. The Stoxx 50 index of leading European shares was down 1.6 per cent while Germany’s DAX fell 1.2 per cent.


10:55 a.m.

French Finance Minister Michel Sapin says it is up to Greece to come up with new proposals following the referendum, hours before German Chancellor Angela Merkel heads to Paris for an emergency meeting with French President Francois Hollande.

“The basis of a dialogue is on the table, but it’s up to Greece to show us that it takes the dialogue seriously and that it knows it can stay in the euro and that there are decisions to make,” Sapin told Europe 1 radio Monday.

France had no desire to see Greece leave Europe but Sapin insisted that the bloc would not be destabilized if that happened. “It’s Greece that is in difficulty. Europe is not in difficulty — Europe is facing a Greek difficulty.”


10:30 a.m.

A meeting between Greek Prime Minister Alexis Tsipras and the leaders of six of the seven parties represented in Parliament is underway at the presidential palace.

Tsipras requested Monday’s meeting shortly after the referendum results showed a clear victory for the “no” camp. He said he aimed to share his strategy for negotiations with creditors on a new bailout deal and call for support.


10:15 a.m.

Government spokesman Gabriel Sakellaridis said Prime Minister Alexis Tsipras “feels the need to thank (Varoufakis) for his ceaseless efforts to promote the government’s positions and the interests of the Greek people, under very difficult conditions.”


8:57 a.m.

Greek Finance Minister Yanis Varoufakis has resigned, saying he was told shortly after the Greek referendum result that the some eurozone finance ministers and Greece’s other creditors would prefer he not attend the ministers’ meetings.

Varoufakis issued an announcement Monday saying Prime Minister Alexis Tsipras had judged that Varoufakis’ resignation “might help achieve a deal” and that he was leaving the finance ministry for this reason.

Varoufakis is known for his brash style and fondness for frequent media appearances when the new government was formed in January. He had visibly annoyed many of the eurozone’s finance ministers during Greece’s debt negotiations.

He said it’s crucial there is a “proper resolution” involving debt restructuring immediately.

“I shall wear the creditors’ loathing with pride,” he said, adding that he fully supports the prime minister and the government.


3:35 a.m.

The final results of Greece’s bailout referendum are in, with all 19,159 precincts reporting. The “No” side won with a higher than expected 61.31 per cent, while “Yes” got 38.69 per cent. A total of 6.16 million Greeks voted in Sunday’s referendum, or 62.5 per cent of eligible voters.