PARIS/ATHENS - France and Germany told Greece on Monday to come up with serious proposals in order to restart financial aid talks, a day after Greeks voted overwhelmingly to reject more austerity.
German Chancellor Angela Merkel and French President Francois Hollande, the euro zone's most powerful leaders, said Athens must move quickly if it wants to secure a cash-for-reform deal with creditors and avoid crashing out of the single currency.
Raising the pressure on Greek Prime Minister Alexis Tsipras before a euro zone summit on Tuesday, the European Central Bank decided to keep a tight grip on funding to Greek banks.
By voting decisively against tough bailout conditions, as Tsipras had urged them to do, Greeks have strengthened his negotiating hand. But the crisis remains acute, with the country's banks already closed for more than a week to avoid a massive outflow of money that could lead to their collapse.
Only emergency support from the ECB is keeping the banks afloat and saving Greece from a chaotic euro exit that would inflict more pain on its people and gravely damage the currency, the strongest symbol of the EU's drive for an "ever closer union" on a continent once ravaged by two world wars.
In a warning shot to the banks, the ECB raised the amount of collateral they must post for any loans. The move does not affect the lenders right away, but served as a reminder that their fate lies in its hands.
In a sign that Athens is keen to seek a new deal, Greece's combative finance minister, Yanis Varoufakis, resigned, apparently under pressure from other euro zone finance ministers who did not want him as a negotiating partner.
Tsipras had earlier promised Merkel that Greece would bring a proposal for a deal to Tuesday's summit, a Greek official said. It was unclear how much it would differ from other proposals rejected in the past.
Late on Monday, the prime minister's office said Tsipras had spoken with EU Commission President Jean-Claude Juncker and Hollande. His office did not provide details about the conversations.
After talks with Hollande earlier in the day in Paris, Merkel said, "We say very clearly that the door for talks remains open and the meeting of euro zone leaders tomorrow should be understood in this sense." But, she added, the requirements were not in place at the moment to start negotiations about a concrete euro zone bailout fund programme.
Top officials in both the United States and Japan called on both sides to seek a resolution.
U.S. Treasury Secretary Jack Lew spoke with both Tsipras the his new finance minister and said Washington looked forward to Athens and other parties resuming conversations toward resolving the Greek situation, a Treasury spokeswoman said.
Lew voiced hope such an outcome "will allow Greece to make difficult but necessary fiscal and structural reforms, return to growth, and achieve debt sustainability within the euro zone,"the Treasury statement said.
Similarly, Japan's economics minister, Akira Amari, said Greece and the European Union should work hard to strike a win-win deal that would keep Greece in the currency union. "I understand why the Greek people are venting their frustration. Fiscal consolidation is not making progress," Amari told reporters. "They are in deflation. The world expects Greece and the EU to cooperate on a final bailout plan." A German Finance Ministry official dismissed the idea that Berlin would be willing to concede some debt relief to Athens, a position that Tsipras's government has long sought.
But an ECB governing council member, Ewald Nowotny, held out the possibility of bridge funding for Greece while a new bailout programme is being negotiated. "Whether it's possible is something that has to be discussed," he told Austrian state TV.
Hollande said, "It's now up to the government of Alexis Tsipras to offer serious, credible proposals so that this 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."
NOT MUCH TIME
Hollande stressed that there was 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. "(The Greeks) must make a decision, this evening or tonight, what they are going to do," Rutte told his Parliament. 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 said talks to avert it would be easier without 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 sacrifice suggested Tsipras was determined to try to reach a last-ditch compromise with European leaders.