European Commission takes hard line on Greece

The European Commission has presented a bleak picture of the likely political and financial follow-up to Greece's No referendum, refusing to say that the county will remain in the eurozone and indicating that the limited debt relief offer that was on the table prior to the referendum is now gone.

Speaking less than 24 hours after Greeks rejected the creditors' bailout terms, euro commissioner Valdis Dombrovskis i made it clear that the referendum result was largely irrelevant as the same problems remain, and may have become more difficult in the meantime.

He noted that the referendum was "neither factually or legally correct" as Greeks were voting on proposals that had not been formally endorsed by the eurogroup of finance ministers and on a bailout programme that had expired.

"The 'No' result unfortunately widens the gap between Greece and other eurozone countries. There are going to be very few winners in this situation," he said.

While he stated that "the place of Greece is, and remains, in Europe", when asked whether he would extend this assurance to eurozone membership, Dombrovskis repeated only past comments that a No vote "makes a solution more complicated".

Restarting negotiations with Athens would need the official go-ahead from the eurozone finance ministers, who will meet ahead of the euro summit beginning at 6pm local time in Brussels on Tuesday.

Dombrovskis also said that the debt relief offered back in November 2012 was "not on the table any more" as the bailout programme that ran out on Tuesday (30 June) was "not successfully completed".

He said it was up to the eurogroup to "decide the new mandate of the commission and whether the new mandate includes the debt issue".

Prime minister Alexis Tsipras i, who has said his negotiating hand has been strengthened following the referendum, has indicated he will submit new proposals at the summit.

But relations between Greece and several of its eurozone partners have deteriorated substantially over the course of the last week with Germany and several eastern states viewing the situation through the prism of whether Greece has played by the rules.

Sigmar Gabriel, Germany's vice-chancellor and a social democrat, Monday said that debt relief before the end of the reform process would be inconceivable and that Tsipras must be prepared to compromise.

Meanwhile France has adopted a softer line towards Greece with a meeting later Monday between president Francois Hollande i and Germany's Angela Merkel i set to be key for how the Greece saga further unfolds and the extent to which the negotiating door remains open to Tsipras.