MORNING BID EUROPE-A daily note from our Economics/Politics Editors

* A daily view from European Affairs Editor Paul Taylor. The views expressed are his own.

LONDON, July 6 (Reuters) - After Greece's resounding 'No' vote against the terms of its defunct international bailout, the resignation of outspoken Finance Minister Yanis Varoufakis this morning is a big sign that Prime Minister Alexis Tsipras is serious about seeking a last-ditch deal with European leaders this week to prevent his country crashing out of the euro zone and into economic oblivion.

Euro zone finance ministers had made clear they never wanted to see Varoufakis again after he capped up five months of hectoring lectures by branding them terrorists on Saturday. Such pumped-up rhetoric, promising Greeks an instant deal on improved terms with a big haircut on its official debt to euro zone partners, made him a liability at the Eurogroup table.

European leaders are nursing a giant hangover after yet another referendum defeat for the "European project", even if that was not on the ballot paper. EU policymakers hid under their desks on Sunday night to avoid cameras and microphones, working the phones and issuing only minimalist late-night statements.

Greece's fate is now in the hands of Angela Merkel, under huge pressure at home to cut Athens loose from the euro zone, and the European Central Bank, meeting to decide how much longer to keep shuttered Greek banks on a liquidity lifeline. The ECB is expected to keep the current cap on funds for the banks, slowly tightening the noose but leaving them a few days' air.

In Athens, Tsipras meets opposition parties to seek a semblance of national unity before he goes to Brussels for an emergency euro zone summit on Tuesday that is a make-or-break moment for Greece.

He made a modest victory speech on Sunday, in contrast to his campaign talk of rejecting a humiliating European ultimatum. He wants a deal, but whether one is still possible is not clear, and whether he now has a free hand to negotiate one that is bound to involve painful sacrifices is also uncertain.

In Germany, the mood of "Griechen raus" (Greeks out) is rapidly gaining ground. Mass-circulation Bild has been campaigning daily for a "Grexit".

On Sunday, Vice-Chancellor Sigmar Gabriel threw the weight of Merkel's Social Democratic junior coalition partners behind the crusade.

A chorus of leading conservatives demanded that Greece must be punished for breaking euro zone rules and pushed out of the currency area, while Finance Minister Wolfgang Schaeuble talked at the weekend about a possible temporary exit.

(editing by John Stonestreet)