A crisis meeting of EU leaders on Sunday is “really the final deadline” for Greece to reach a deal with creditors or face economic collapse, ECB Governing Council member Christian Noyer said on Wednesday.
Noyer said the ECB had already interpreted its own rules “to the maximum” to help Greece and would be obliged to cut off liquidity as soon as there was no prospect of a deal.
“The Greek economy is on the verge of catastrophe, we absolutely need a deal on Sunday. It is the final deadline, afterwards it is too late,” he said.
“In the last six months we maintained the lifeline set up for Greek banks and put enormous sums of money on the table … Our rules oblige us to stop immediately at the point when there is no prospect of a political accord on a programme, or at the point when the Greek banking system crumbles – which would happen if it enters generalised default on all its debts.”
Euro zone members have given Greece until the end of the week to come up with fresh proposals in return for loans that will keep the country from crashing out of Europe’s currency bloc.
All 28 European Union leaders are due to meet on Sunday.
Speaking after Greek Prime Minister Alexis Tsipras came to a meeting of euro zone leaders in Brussels on Tuesday without new proposals, European Commission President Jean-Claude Juncker said he had detailed plans to cope with a “Grexit” if Tsipras failed to deliver.
Asked if the ECB had similar contingency plans, Noyer replied: “We are always ready for all situations that could emerge but for six months we have been firmly working on the basis that Greece will stay in the eurozone.”