European Central Bank President Mario Draghi suggested the Greek debt crisis is getting increasingly hard to fix, speaking hours before the ECB maintained its freeze on extra aid for the country’s banks.

Landing in Rome on Wednesday after late-night talks in Brussels, Draghi was asked by Italian journalists if he would really be able “to close the dossier on Greece,” Il Sole 24 Ore and Corriere della Sera reported. “I don’t know,” he’s cited as saying. “This time it’s really difficult.” An ECB spokesman declined to comment on the reports.

Draghi’s remarks hint at the impasse faced by euro-area policy makers as they await a detailed economic package from Greek Prime Minister Alexis Tsipras before Thursday’s midnight deadline. Without evidence of a bailout plan, Draghi and his colleagues on the Governing Council refrained from increasing Emergency Liquidity Assistance for Greek banks from the current total of almost 89 billion euros ($98 billion).

ECB Governing Council member Jens Weidmann, the head of Germany’s Bundesbank, said on Thursday that the ECB shouldn’t expand that credit line unless Greece is in a rescue program.

David Fuller's view

Germany, most of Northern Europe and the ECB would like the problem with Greece to be dealt with on an economic basis.  In other words, Greece either accepts the latest assistance terms offered by the EU troika, or both sides help Greece to leave the Euro and EU, ideally with a minimum of disruption. 

However, there is considerable pressure from within the EU bureaucracy and also from the Obama Administration for a political solution that keeps Greece on board.  This is reflected by today’s rally in European shares, with the additional help of a short-term oversold condition.