Angela Merkel and François Hollande during a press conference after their meeting at the Elysee Palace tonight. Photograph: Getty Images.
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No relief in sight for Greece as Germany and the ECB toughen stances

Merkel warns that it is up to Tsipras to make new proposals as the country's banks are put under further strain. 

One of the main arguments made by Alexis Tsipras for a No vote in the Greek referendum was that it would strengthen his government's bargaining power. But a day after the country's decisive rejection of the previous eurozone offer, there is little sign that it has done so. At her joint press conference this evening with François Hollande following their meeting, Angela Merkel emphasised that the onus was on Greece to come forward with "very specific proposals" (offering no immediate concessions of her own) and even went as far as to describe the previous package as "generous". Sigmar Gabriel, Germany's vice chancellor and the leader of Merkel's coalition partners, the Social Democrats, has declared that "The ultimate insolvency of the country seems to be imminent". 

Hollande, as before, took a more accommodative stance. But while stating that "the door is open" (though not as open as he would like), he warned that "There’s not a lot of time left. There is urgency for Greece and there is urgency for Europe". Valdis Dombrovskis, the European Commissioner for the euro, similarly concluded that "The no result unfortunately widens the gulf between Greece and other eurozone countries … There is no easy way out of this crisis. Too much time and too many opportunities have been lost."

It is time that is indeed the biggest obstacle to a deal. Greek's banks are close to running out of cash (one of the four biggest is reported to be on the brink). But the European Central Bank, the institution keeping them afloat, has again capped the level of emergency liquidity at €89bn. Rather than offering greater relief, it has tightened the noose by forcing the banks to provide more assets to the Bank of Greece as security against the loans. Robert Peston reports that this has reduced the spare cash-raising capacity of the banks from €17-20bn to between €5-7bn. By acting in this way, the ECB has opened itself to the charge that it has exceeded its mandate by intervening in a political dispute. 

The danger is that unless Greece makes immediate progress with the troika in the next two days, the banks will no longer able to function even at their current limited level (with ATM withdrawals limited to €60 a day and overseas transactions banned). Such a financial collapse would force Greece to leave the euro in order to allow its banks to issue a new and heavily devalued currency. Few are confident that it will be able to make a scheduled payment of €3.5bn to the ECB in two weeks' times. 

Of the three main possible outcomes to the crisis - a long-term deal to keep Greece in the euro, another short-term financing arrangement ("kicking the can down the road" as it has become known) or Grexit - it is the third that appears ever more likely. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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The campaign to keep Britain in Europe must be based on hope, not fear

Together we can show the world a generous, outward-facing Britain we can all be proud of.

Today the Liberal Democrats launched our national campaign to keep Britain in Europe. With the polls showing the outcome of this referendum is on a knife-edge, our party is determined to play a decisive role in this once in a generation fight. This will not be an easy campaign. But it is one we will relish as the UK's most outward-looking and internationalist party. Together in Europe the UK has delivered peace, created the world’s largest free trade area and given the British people the opportunity to live, work and travel freely across the continent. Now is the time to build on these achievements, not throw them all away.

Already we are hearing fear-mongering from both sides in this heated debate. On the one hand, Ukip and the feuding Leave campaigns have shamelessly seized on the events in Cologne at New Year to claim that British women will be at risk if the UK stays in Europe. On the other, David Cameron claims that the refugees he derides as a "bunch of migrants" in Calais will all descend on the other side of the Channel the minute Britain leaves the EU. The British public deserve better than this. Rather than constant mud-slinging and politicising of the world's biggest humanitarian crisis since the Second World War, we need a frank and honest debate about what is really at stake. Most importantly this should be a positive campaign, one that is fought on hope and not on fear. As we have a seen in Scotland, a referendum won through scare tactics alone risks winning the battle but losing the war.

The voice of business and civil society, from scientists and the police to environmental charities, have a crucial role to play in explaining how being in the EU benefits the British economy and enhances people's everyday lives. All those who believe in Britain's EU membership must not be afraid to speak out and make the positive case why being in Europe makes us more prosperous, stable and secure. Because at its heart this debate is not just about facts and figures, it is about what kind of country we want to be.

The Leave campaigns cannot agree what they believe in. Some want the UK to be an offshore, deregulated tax haven, others advocate a protectionist, mean-hearted country that shuts it doors to the world. As with so many populist movements, from Putin to Trump, they are defined not by what they are for but what they are against. Their failure to come up with a credible vision for our country's future is not patriotic, it is irresponsible.

This leaves the field open to put forward a united vision of Britain's place in Europe and the world. Liberal Democrats are clear what we believe in: an open, inclusive and tolerant nation that stands tall in the world and doesn't hide from it. We are not uncritical of the EU's institutions. Indeed as Liberals, we fiercely believe that power must be devolved to the lowest possible level, empowering communities and individuals wherever possible to make decisions for themselves. But we recognise that staying in Europe is the best way to find the solutions to the problems that don't stop at borders, rather than leaving them to our children and grandchildren. We believe Britain must put itself at the heart of our continent's future and shape a more effective and more accountable Europe, focused on responding to major global challenges we face.

Together in Europe we can build a strong and prosperous future, from pioneering research into life-saving new medicines to tackling climate change and fighting international crime. Together we can provide hope for the desperate and spread the peace we now take for granted to the rest of the world. And together we can show the world a generous, outward-facing Britain we can all be proud of. So if you agree then join the Liberal Democrat campaign today, to remain in together, and to stand up for the type of Britain you think we should be.