EU leaders to meet on Greek bailout today; FM quits

Greece's combative finance minister Yanis Varoufakis resigned on Monday, removing one major obstacle to any deal to keep Athens in the eurozone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout.

Leftist Prime Minister Alexis Tsipras promised German Chancellor Angela Merkel that Greece would bring a proposal for a cash-for-reforms deal to an emergency summit of eurozone leaders on Tuesday, said a Greek official. It was unclear how much it would differ from other proposals rejected in the past. Gloomy officials in Brussels and Berlin said a Greek exit from the currency area now looked ever more likely.

But they also said talks to avert it would be easier without Varoufakis, an avowed “erratic Marxist” economist who infuriated fellow eurozone finance ministers with his casual style and indignant lectures. He had campaigned for Sunday's “No” vote, accusing Greece' creditors of “terrorism”.

“I was made aware of a certain 'preference' by some Eurogroup participants, and assorted 'partners', for my 'absence' from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement,” said Varoufakis in a statement. His sacrifice suggested Tsipras was determined to try to reach a last-ditch compromise with European leaders.

Greece’s political leaders, more accustomed to screaming abuse at each other in parliament, issued an unprecedented joint statement after a day of talks at the president's office backing efforts to reach a deal with creditors. They called for immediate steps to reopen banks and said any deal must address debt sustainability — code for reducing Athens' crushing debt — but gave no hint of concessions from the Greek side towards lenders' demands for deep spending cuts and far-reaching reforms of pensions and labour markets.