Door to talks is open, France and Germany tell Greece

Hollande and Merkel call for "serious proposals" from Athens ahead of EU meetings on Tuesday.

French president Francois Hollande and German chancellor Angela Merkel arrive for a press conference after their meeting at the Elysee Palace on July 06, 2015. Thierry Chesnot / Getty Images

Paris // The door is open for a return to debt negotiations with Greece, but Athens will have to make “serious” proposals, France and Germany said on Monday, a day after Greek voters rejected bailout terms set by international lenders.

“It is now up to the government of Alexis Tsipras to make serious, credible proposals so that this willingness to stay in the eurozone can translate into a lasting programme,” French president Francois Hollande said.

“I stress the fact that time is running out and there is urgency – urgency for Greece and urgency for Europe,” Mr Hollande said after a meeting with the German chancellor Angela Merkel in Paris.

Ms Merkel echoed Hollande’s comments, but said conditions on returning to talks for a new rescue package “have not yet been met”.

“And that is why we are now waiting for very precise proposals from the Greek prime minister, a programme that will allow Greece to return to prosperity,” Ms Merkel said.

In a sign that he hopes to reach a deal as soon as possible, Mr Tsipras on Monday appointed a new, mild-mannered finance minister to lead talks with bailout creditors, replacing Yanis Varoufakis, the hard-talking professor who clashed regularly with his European counterparts.

Euclid Tsakalotos, a 55-year-old economist, appears more willing to reach a compromise with creditors and will be tested as soon as Tuesday, when he will meet the other 18 eurozone finance ministers in Brussels.

That meeting is meant to seek the basis for a deal that European leaders, including Ms Tsipras, might discuss at an emergency summit later in the day.

Greece’s financial situation is getting more difficult by the day. It had to close the banks last week to prevent their collapse in the face of a run, and imposed limits on cash withdrawals and transfers. Banks remained closed on Monday, with only a few branches opening for pensioners to receive emergency assistance.

Greek banks were to reopen on Tuesday, but will now remain closed until Thursday, with limits on daily withdrawals unchanged, officials said on Monday as the European Central Bank (ECB) maintained its liquidity assistance to the nation’s beleaguered lenders.

“Until Wednesday evening we continue as things stand today,” said Louka Katseli, chairwoman of the National Bank of Greece.

“If there is a decision by the European Central Bank in the meantime enabling us to modify this decision, there will be a new decision,” she added, speaking on behalf of the association of Greek banks.

The ECB on Monday decided to maintain the emergency liquidity assistance (ELA) at the same level set on June 26, despite a request for an increase from the Bank of Greece.

The ELA is currently the only source of financing for Greek banks, and therefore the Greek economy. But with Greece’s bailout programme now officially expired and in the absence of any new programme, the conditions for its continuation are no longer met.

But analysts predicted that the ECB would not want to be the one to pull the plug on Greece and force the country out of the single currency.

* Agencies