European policy makers raised pressure on Greece to return to the negotiating table and make further concessions to unlock aid, as each side laid out its demands to rally support for its respective position.
Stocks and the euro fell on Monday as the extent of the policy divide that remains to be resolved was laid bare after weekend talks billed by European officials as a last attempt to end the stand-off broke up early.
Europe needs a "strong and comprehensive agreement, and we need this very soon," European Central Bank (ECB) President Mario Draghi told lawmakers at the European Parliament in Brussels on Monday. "While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps."
Draghi said the ECB would keep approving funding for Greek banks provided they are solvent, calling for a "quantum leap" in the way the euro zone was organised.
As the talks go on, it has fallen to the ECB to keep Greece afloat, by allowing the country and its lenders to run up an ever-higher overdraft with the euro zone.
"Liquidity will continue to be extended as long as Greek banks are solvent and have sufficient collateral," Draghi told the European Parliament, referring to the emergency funding for Greek banks.
But he signalled that there were limits to such assistance, which is now tipping euro 118 billion. Among those are rules that prohibit direct funding of governments by central banks.
"However, in a situation where the Greek government doesn't have market access, this liquidity cannot be used to circumvent the prohibition of monetary financing," he told lawmakers.
Talks between Greece and its euro zone backers collapsed at the weekend.
Without central bank cash to prop up Greece's banks, which have seen deposits shrivel, controls on withdrawals appear unavoidable. Lending would evaporate and euros would become scarce, dealing the already weak economy a mortal blow.
Separately, the Greek government wants to raise the amount of short-term treasury bills it can issue to tackle its cash crunch. But Draghi said that to even consider this, it was necessary to see "a credible perspective for a successful conclusion of the current review and subsequent implementation".
He added that this implied the euro zone countries sending more cash to Greece.
Draghi said it was up to the Eurogroup of euro zone finance ministers to decide whether to complete a review of Greece's current bailout programme and send further funds to Athens
With signs that negotiating fatigue was stoking intransigence on all sides, some euro-area officials publicly raised the prospect of Greece's exit from the currency region as the Greek government suggested it had reached the limits of its ability to make concessions. Finance ministry officials from the 19-nation euro zone are due to hold a Greece call on Tuesday ahead of a meeting of ministers later this week.
"We're reaching a potential period of turbulence if no accord is found," French President Francois Hollande told reporters in Paris on Monday. "This is a message for Greece, because Greece mustn't wait, it must renew talks with the institutions," he said, referring to the International Monetary Fund, the ECB and the European Commission.
Awaiting invitation
Greek Prime Minister Alexis Tsipras's government said that it was awaiting an invitation from its creditors and is ready to respond anytime to continue the negotiations, according to an email from the premier's office.
The EU commission and IMF separately outlined their respective goals in the talks that broke up after just 45 minutes on Sunday. The focus now shifts to a June 18 meeting of euro-area finance ministers in Luxembourg. Officials have focused on that as a make-or-break session for Greece's ability to avert default and stay in the currency union.
Tsipras, in a statement on Monday, portrayed Greece as the torchbearer of democracy, standing firm against creditors' demand for pension cuts.
"One can only suspect political motives behind the fact that the institutions insist on further pension cuts, despite five years of pillaging," Tsipras said. "We will wait patiently till the institutions adhere to realism."
That prompted a rebuke from the European Commission.
"It is a gross misrepresentation of facts to say the institutions are calling or have called for cuts in individual pensions," spokeswoman Annika Breidthardt told reporters in Brussels.
