Germany fears knock-on debt write-off for Ireland
Germany is unwilling to write off Greek debts as it fears this would result in similar deals for Ireland, Spain and Portugal.
Following Greece's decisive No vote in Sunday's referendum on the previous bailout deal, Greece has been given a last chance to come up with new proposals to remain in the euro - or else leave the single currency.
The European Central Bank has kept the drip-feed of emergency credit to Greek banks open but has piled pressure on EU leaders to strike a deal soon.
However, the ECB did tighten its terms and make it harder for Greece's banks to access emergency loans.
Greek banks will remain closed today and tomorrow, with €60 limits on daily ATM withdrawals.
EU leaders will examine new reforms at an emergency summit in Brussels tonight.
However, Germany believes a new debt relief deal isn't feasible as other EU countries, such as Ireland, will then demand similar terms.
Germany's deputy chancellor Sigmar Gabriel indicated the single currency would not be able to cope if other countries across the EU had to get financial assistance if they found themselves in similar economic turmoil to Greece. "It would blow up the euro," he said.
German Chancellor Angela Merkel is also maintaining a hardline stance on Greece.
Taoiseach Enda Kenny has again ruled out a debt write-down for Greece, but has backed debt restructuring.
"There wasn't any talk of write-downs but there was talk of debt re-profiling and that happened in our own case with the promissory note," Mr Kenny said.