Anchor you are welcome to the pulse. I am manus cranny. Also ahead of this hour, we will speak to the former italian Prime Minister mario monti and get his reaction. That is at 9 45 a. M. Stay tuned for that. He and for foxs, Yanis Varoufakis, has announced his stepping down. The news at degrees voted overwhelmingly to retract further astray ready in a referendum. Prime minister Alexis Tsipras held at the result is a great victory. That would allow him to return to the negotiating table with a strengthened hand. With all of the angles covered. Erik schatzker on the ground and paul gordon in frankfurt. Mark barton is standing by. Strata Erik Schatzker. What a 24 hours. The votes. What is the significance . Varoufakis pulled one out of the bag. Will do appreciate improve their negotiating . Erik let me quote from Yanis Varoufakis on his blog. An excerpt, soon after the results i was made aware of a certain preference by eurogroup partners from my absence, an idea that the Prime Minister judge to be helpful. Yanis varoufakis was the world to believe his stepping down to gear Prime MinisterAlexis Tsipras a helping hand in his negotiations it is well documented as you know that varoufakis is very unpopular with this fellow ministers. I want to pause. Varoufakis may have been victim of internal syriza. Politics. Mr. Varoufakis had a large worldwide media profile. She held a press conference before the Prime Minister took to the airwaves. Last night was the last will receive mr. Varoufakis in a blue tshirt and helmet ride through the office. Was that because he was really trying to give tsipras mr. A health mr. Tsipras a helping hand or his last act of defiance . Manus talk to me about the mood. A resounding no vote. In terms of creditors position we know hollande and merkel will go back. They are not running, are they . Erik they are not a judging from the statements they made last week. Here is an open question we heard from varoufakis and the number two in syriza that the negotiators or creditors were willing to hit at the table and the greek government was willing. There was enormous amount the daylight between the two sides. Yes europe understands it greeks do not want war austerity. How does it change in the situation . Mr. Sippers encapsulated in comments he made last night. Here is an accept. Prime minister tsipras our immediate priority is the expedient opening of the banks. I am certain the ecb understands that the economic crisis a humanitarian dimension in our country. Erik everybody wants to talk about the possibility of a deal to avoid a gregs it. As you have heard from so many people the far more immediate problem, the want to which tsipras alluded is the scheduled opening of the banks tomorrow. If the banks do not open and it looks as though there will be an indefinite banking holiday, whatsapps to the support he enjoyed last night with a 61 vote against debtor what happens to the support he enjoyed last night with a 61 vote against the referendum . Manus that is the reality. Lets turn to paul. The question is the hazard can they provide liquidity, should they continue to provide . A tough position for them, isnt it . Paul very tough indeed. Is there only solvent the cause liquidity at the moment. They may struggle to do that. The ecb holds the fate and its hands. If the banks do not open tomorrow, they probably need more money. The question for the governing Council Members is shared as they do that . If they do likely to give politicians a little bit more time to come up with some kind of deal. It is always pocked with the ecb will put a deadline on that as they have. Possible that the ecb will put a deadline on that as they half. Therefore, we have to pull the plug. It would cause of the collapse of the Banking System and put greece on the path toward a exit. But time is running gap. Manus paul, lets switch to hans. You will be monitoring. Hollande and merkel will meet. Youve also had one saying the vote must be respected. The vote itself will not fix it. Hans everybody is waiting from greece. The idea is you debt restructuring should not be taboo that will be music to the ears of mr. Tsipras. The french is probably talking about restructuring getting closer to a deal. We have not heard any similar language of the german side. What we have heard from the austrian finance minister is no other additional eight. We are waiting to hear from mr. Shore blood mr. Schaeuble or lagarde. We have heard mr. Varoufakis will not necessarily made that much easier. There is a view that mr. Tsipras is as much as black as varoufakis is as much to blame as varoufakis. Manus thank you. Hans nichols, Erik Schatzker paul gordon, a quick look at how the markets are reacting. Mark the options to protect yourself. Mark earlier, the big stocks rose to the highest in three years and has come down a little bit. The benchmark to see how it is faring. This the euro stoxx 50, the benchmark all 50 blue chips within the eurozone. Down by 1. 7 . Earlier it fell as much as 2. 4 free a week ago when the stoxx 50 opened, it open down. Today, down to the lowest level since february. The stoxx 600 is down by 1. 2 . Last week it fell by 3. 1 . European stocks last week had their largest weekly drop of the year. The ridge of 40 billion euros were wiped off of the value 340 billion euros were wiped off the value of the stock market. 14 billion wiped off of Global Stock Markets as measured by the msci. This the eurodollar intraday. Interesting chart. Earlier around 10 30 p. M. Last night, get in close free it fell as much as 1. 3 . Since as then, it is still lower by 0. 25 , since then it has improved. It fell last week for the second week in a row against the dollar. History israel. Self because seven days ago, the euro opened lower against the dollar after tsipras call to the referendum. This how the bond market is faring. Pretty much a flight to safety treasury yields dropped to the lowest since june 19. German bonds are down. A look at greece tenure. They continue to climb. A week ago today, the yield on the greek 10 year roses much as 200 points. Though most ever. Things are not as bad. A week ago, these two were as high as 50 basis points. Now six or seven or higher. Clearly some effect from the success of the anova vote and the greek referendum a but nothing like events from a week ago. Manus lets see of the rest of the week unfolds. Weston that in mind, onto twitter. Our twitter question is does varoufakis quitting help the greek negotiations . There is a man in the building who can help me. It is unicredits chief globe economist. Everett, Greg Caffe Eric great have you with us. Well, varoufakis has resigned pretty he intimated but cause the creditors. Does that improve the possibility of negotiations more constructive . Guest i do not think so. As your colleagues said he may have resigned for internal reasons. He was a bit of a prima dona a smart guy and charismatic. But at the advice, the thing to take away is the job of politicians, and their positions because they are good of dealing with people they do not like. That is their whole life. You do compromises and do not make it personal. They say it again and again, this is in my relations has not deteriorated. Never had a one. It is slightly positive. Do not forget, tsipras is not an easy fellow either. Manus why not join the fray . No vote, how does that equate in terms of raising the risk that greece will have to exit the euro . Erik nielsen i changed my mind. I put the possibility well above 50 . Theres a couple of possibilities you could get a deal of source that keep them in and changes the government or something. I think the overwhelming probability is unfortunately creek is leaving. And desert greece is leaving and greece is leaving and into chaos. Where it takes us, i do not know. That is the difficult question. Manus that level chaos is something nobody wants to focus on. The immediate issues. One is the banks. Not enough money weapon told by the banking authority. Half a billion euros in the system. Nothing left. Can or should the ecb actually give something to the Banking System . Erik nielsen i do not think they have a choice. They cannot do it. They cannot give ela. They are probably borderline doing it already. Unless of the european taxpayers the government so theres no real prospect of july 20 defaulting on the bonds, if those bonds are about to default, no possible way manus take me through that. The ecb cannot morally illegally, excuse reprieve cannot legally lend to the banks. Back to the ecb. Erik nielsen the greek banks would become insolvent if the greek government default and the day july 20. Everybody says defaulting to the ecb, it is under bonds. Greek banks have those bonds. If they are defaulted upon, no question you can ask the greek bank. And then it is clear, you can see this two weeks out. The ecb now, the ela will be completely out of the question legally unless they get a guarantee from their own government they will underwrite the banks or government. That is what the meeting tomorrow is about after the eurogroup. Manus given data, these markets are remarkably content and this what i said last monday. Surprise by moderate reaction in spread in the euro and equities. That scenario, is that the rail contagion . Not the real potential contagion . Erik nielsen there will be some contagion. But i am firmly believe that it is quite modest. Lets see what happens when america comes in later in the day. We sought quite a clear picture last week. The asians get worry and they sell europe. The americans step in. Maybe not today. I would not be surprised over the next few days if that is the picture. It is impossible to make a clear link from the greek problem to italy, spain, or portugal. If they were stronger because the ecb would support of them. Manus you will be with me. We will be with erik nielsen chief global economist. What else is on our radar. It has been a volatile day of training. China special fresh round of measures to stem losses. The shanghai composite index rose nearly 8 before closing up 2. 4 . Chinese authorities suspended initial Public Offerings and a centralbank said it would provide liquidity. U. K. Chancellor George Osborne said the greece crisis justifies the push for further austerity. As he prepares to meet prime Minster David cameron and mark carney to assess any followups. Any falls out. And rollsroyce has cut is guidance of fullyear profit. The engine maker said a Lower Oil Price will play on the marine business. It is trading down around nine per to percent. 9. 2 . Well be straight to the former a tiein Prime Minister mario monti and getting his reaction. Will be speaking to the former italian Prime Minister mario monti and getting his reaction. We will be speaking to elena pan aritis. And will look at one of londons hottest restaurants. Stay with us. China would be more from greater concern but cause of this dell in the world economy. Thats because of this scale in the world economy. Because of its scale in the world economy. Much more of a concern. Manus that was Martin Sorrell saying china is a bigger concern than greece. Policymakers unleashed more steps to stop the plunge and equities. How did the markets react . More with mark barton. Mark the shanghai composite down by as much as 7. 8 , the biggest intraday mover since september 2008. The fresh round of measures announced by the government failed to stem not the selloff, we did not get as much as a push. An increase of 2. 4 . A majority of the stocks with a companies, rallies for the nations biggest financial and oil companies. All of the gains on monday. Supported by two of the biggest companies. Petro china and a bank. Thats what you need to know. Down by 27 . Thats where the index peaked on the 12th of june. The chinese stock market and that time has plummeted by 2 trillion. A bigger amount that many stock markets are valued at. Want to show you the hong kong market. It intraday bear market today. Down by 11 from its peak on 11 april 28. Today it is sell the biggest drop in the reagan years. We are followed by 11 . There is speculation the chinese investors were moving money out. A much more open market and the mainland stock market. Back in april, at it is highest since 2007. How things have changed in china and things are changing in hong kong. Manus thank you for that. Straight to the chief asian economics correspondent. They are common goal within new positions pretty much every day all of the week. Reporter good morning. What the latest moves are doing is raising questions about how committed to market reforms chinese policymakers are. They said that they are pledged to the open market and breaking down barriers and allow capital total flow and but the latest moves to intervene in the way they have has risk questions about whether chinese are committed to the past or not . The backdrop of a time when china was to internationalize is currency. It seemed they are wanting in doing another. Manus lets leave it there. Enda curran for us on the china store. Back to erik nielsen. I love what you said is greece is important relevant but a sidebar. What we are asking about is china. Erik nielsen that is exactly right. From his side, when i see around to europe he is issues like china. We will talk about greece because it is interesting and the front pages a newspaper for. On the business side, it does not matter. Very dedicated to get somebody who really sees concern. Look at the automakers the anybody else, these guys are taking 20 or 30 of profits from china. If china slows down as they are this where the focus is and not greece. It is a political crisis not economic crisis. Manus economic value everything good our pockets. Where have you guys decided or where china will slow down to . Are you expecting more stimulus . We have had 4 rate cuts. Not much is working. What more do you expect is a will do . Erik nielsen i do not think they are growing at the rate they are saying. If you look a Energy Consumption and that dropped by half compared to 70 or 8 surely growth is slower. You are hitting to down to something 2 or 3 growth over the next five years. The only question is would that happen gradually or in a and that is difficult to say. You have series imbalances in china. Dead serious imbalance serious imbalances in china. The demographics are terrible. You cannot estimate that five years from now growth will be much higher than 3 . How do you get it there is the real issue. Manus i want to go back to one other issue before we finish off. A bail in in greece is something people are talking about. How big of a risk is that . Erik nielsen for the commercial debt . It is a serious issue now. If you get an exit, is a bad word. And exit into a collapse. It is an illusion they you will get paid. If and that scenario, not more likely, staying in the eurozone, it will come. Manus stay with me. We will be back after this break. With xfinity from comcast you can manage your account anytime, anywhere on any device. Just sign into my account to pay bills manage Service Appointments and find answers to your questions. You can even check your connection status on your phone. Now its easier than ever to manage your account. Get started at xfinity. Com myaccount manus welcome back to the pulse. I am manus cranny. The top headlines print Yanis Varoufakis has announced his stepping down as greeces finance minister. He said it was after he was made aware of the preference of some negotiations of his absence. He said he considered it his duty to help a lexis tsipras, the prime it a lexis tsipras and he considered it Alexis Tsipras and you consider it his duty. A group referendum and 61 said no to more spending cuts. Alexis tsipras described the vote as a victim or. A great victory and said he would return to the negotiating table. Describe the vote as a victory. The Ecb Governing Council will meet today. Banks will be closed and were close last week. Lets take a quick look at the markets. After all of this news. Mark barton . Mark the movement is into the haven known as europe. These are the yields the french 10 year is down by 2 basis points and german basis and german 10 year down by five basis point. What is probably more interesting is the spread between the greek and german 10 year yields. I have a chart going back to 2010. The spread is now 16 points which is the highest since 2012. Nothing near the levels we were at the height of the crisis in 2012 when the spread was essentially 35 . That is how today is affecting thes word. The yield difference between the italian 10 year and german 10 year right now is at the highest since june. We are at 1. 59 . Going back to the initial chart a look at the impact of periphery year. Italian yields are rising. Spanish yields are up by eight basis points per remember a week ago today, at one stage both of the yields up by 50 basis points. It seems as though last monday was more of a shock on periphery bond markets than today. You cannot run away from the yield on the greek 10 year. Last week a was stage, a roses much as 423 basis points which was the most ever. A small impact on the periphery but not as much as a week ago. Manus thank you for setting the same. Greece economy has come to a standstill. What does the crisis may for the bond market . We are joined with our guests and erik nielsens with me. Thank you for giving us your time this morning. Before the no vote came, a risk of approximately 50 of greece having to exit the euro and euro zone. Hasnt the no vote increase those risks for you . Guest yes, it has. The expectation is the negotiations will continue the room for compromise. Even more limited than before on what will count as an overwhelming victory of the no camp. The risk of a failure reaching agreement is probably larger than it has ever been. If theres no agreement, it is hard to see how longerterm the greek authorities will keep us on the system running and pay its bills. The only exit then might be to issue ious which is really the but his new currency. So yes in a nutshell, the risk of grexit has increased due to the referendum. Manus when these negotiations were restarting could debt restructuring, if it is on the table, in some form as the imf has alluded to themselves and they are part of his creditor group.