Next: ECB’s Bonnici says European Central Bank liquidity for Greece linked to referendum result

A demonstrator walks along a road with leaflets reading “no” scattered on the ground, following a demonstration supporting the no vote on the upcoming referendum, outside of the European Union office in central Athens, on Thursday, July 2, 2015.

The European Central Bank’s governing council has decided not to increase the liquidity lifeline to cash-strapped Greek banks, a Greek banking source says. It will affect the probability of reaching an agreement between Greece and other euro area countries.

Wednesday’s meeting was the Frankfurt-based bank’s first since bailout talks between Athens and its worldwide lenders collapsed at the weekend and the government announced a referendum on creditors’ latest cash-for-reform proposals.

“It is hard to say how the markets will react if an agreement is not reached, and this is important when talking about consequences to Greece“, said Constancio.

“If the result will be a yes, then it’s the opposite”, he said.

Speaking to reporters in Milan, Bonnici said the value of collateral which Greek banks must offer in exchange for Emergency Liquidity Assistance (ELA) “will depend on Greece’s decision” in the referendum.

Asked if the ECB would grant the assistance that Greek banks need to stay afloat, Constancio said: “I can not in advance answer that question”.