The European Central Bank (ECB) kept a tight funding grip on Greece's banks today in a move that will see the country's shuttered banks run out of cash soon.
The measure ensures that Greek banks must stay closed for the time being and keeps pressure on Prime Minister Alexis Tsipras a day ahead of a meeting of euro zone leaders in Brussels where he needs to present a new reform plan to try and restart rescue talks forGreece.
Greece's central bank had asked for more support from the ECB, according to a banking source, but that was rebuffed after Greeks voted overwhelmingly to reject the terms of an international bailout, raising doubts about the future of Greece within the currency bloc.
Euro zone central bank chiefs and ECB President Mario Draghi's executive decided instead to keep so-called Emergency Liquidity Assistance (ELA) at its current level, leaving Greek banks, and in turn Athens, with little or no room for manoeuvre.
Maintaining the status quo gives Greek banks little time before they use up all of the roughly 89 billion euros of funding available and ensures that they will remain closed in the coming days as cash runs dry.
The government had initially pledged to reopen Greek banks tomorrow (Tuesday) but the head of the Greek banking association said they would stay closed tomorrow and on Wednesday.
The ECB stopped short of what some officials describe as the 'nuclear' option of withdrawing existing support, a measure that would trigger their immediate collapse.
Greek banks were closed all last week after negotiations on an aid deal broke down.
Banks are struggling to keep their automated teller machine (ATM) networks fed with banknotes and dispense cash at the set daily withdrawal limit of €60, gradually using up the remaining cash buffer in the system.
IMF tells Greece it cannot provide money due to missed payment
The International Monetary Fund told Greece it could not provide funds to countries that had missed payments due to the international lender.
IMF Managing Director Christine Lagarde spoke to Greek Prime Minister Alexis Tsipras about the Greek people's rejection in a referendum of the bailout terms of international lenders.
"The managing director explained the fund's inability to disburse under its arrears policy," an IMF representative said in a statement that appeared to refer to Greece's default on an IMF loan last month.
Germany, France press Greece to make credible proposals
In the evening, France and Germany told Greece to come up with serious proposals in order to restart financial aid talks.
After a meeting in Paris, German Chancellor Angela Merkel and French President Francois Hollande said Athens must move quickly if it wants to secure a cash-for-reform deal with international creditors and avoid crashing out of the euro.
A German finance ministry official dismissed the idea that Berlin would be willing to concede some debt relief to Athens, a position that Tsipras' government has long sought.
Tsipras had earlier promised Merkel that Greece would bring a proposal for a deal to an emergency summit of euro zone leaders tomorrow, a Greek official said. It was unclear how much it would differ from other proposals rejected in the past.
"The door is open for discussion," Hollande told reporters, standing next to Merkel after talks at the Elysee Palace.
"It's now up to the government of Alexis Tsipras to offer serious, credible proposals so that this will can be turned into a programme which gives a long-term perspective, because Greece needs a long-term perspective in the euro zone with stable rules, as the euro zone itself does."
Hollande stressed that there is not much time left while Merkel urged Greece to put proposals on the table this week.
Dutch Prime Minister Mark Rutte said Greece must accept deep reforms if it wants to remain in the euro.
He told the Netherlands parliament that creditors had no plans to draft a new proposal after the "No" vote and Greece had to come up with a new proposal ahead of Tuesday's summit.
"They must make a decision, this evening or tonight, what they are going to do," Rutte said. If the Greeks went to Brussels demanding changes because they felt supported by the "No" vote and refused reforms "then I think it is over".
After the Greek 'No' vote, gloomy officials in Brussels and Berlin said a Greek exit from the currency area now looked ever more likely.
But they also said talks to avert it would be easier without former Greek Finance Minister Varoufakis, an avowed "erratic Marxist" economist who infuriated fellow euro zone finance ministers with his casual style and indignant lectures. He had campaigned for Sunday's 'No' vote, accusing Greece' creditors of "terrorism".
His resignation this morning suggested Tsipras was determined to try to reach a last-ditch compromise with European leaders.
Greece's political leaders, more accustomed to screaming abuse at each other in parliament, issued an unprecedented joint statement after a day of talks at the president's office backing efforts to reach a deal with creditors.
They called for immediate steps to reopen banks and said any deal must address debt sustainability - code for reducing Athens' crushing debt - but gave no hint of concessions from the Greek side towards its creditors' demands for deep spending cuts and far-reaching reforms of pensions and labour markets.
The chief negotiator in aid talks with international creditors, Euclid Tsakalotos, a soft-spoken academic economist, was appointed finance minister.