European Central Bank (ECB) chief Mario Draghi dismissed fears of a Greek default and a bubble in bond markets at his regular press conference in Frankfurt on Wednesday, after the central bank held interest rates steady.
Draghi said he was not ready to even "contemplate" a default by Greece, as ECB policymakers approved increasing emergency funding for Greek banks to as much as 80 billion euros ($85 billion), according to media reports.
"Based on the Greek government leaders' statements this option is not contemplated by themselves as well. So I am not ready to discuss any possible situation like that," Draghi told reporters in Frankfurt on Wednesday, speaking on Greece defaulting on repayments to its international creditors.
Greece risks default without additional funds to stay afloat. Athens sold 812.5 million euros of three-month Treasury bills in the second of two auctions on Wednesday, in an effort to raise some much needed cash.
Draghi said that was no ECB-instigated date in mind for the Greek aid or "Emergency Liquidity Assistance" to end. Instead, the funding arrangement was "entirely in the hands of the Greek government and the negotiations that are taking place between the Greek government and the euro area members," he said.
Opposition member of the Greek parliament told CNBC a Greek default would be "completely catastrophic" on Wednesday and should be avoided at all costs. Meanwhile, German Finance Minister Wolfgang Schauble said Tsipras' government had set back Greece's economy, which had been improving.