Greece confirms it will default to IMF

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Greek citizens queue at an ATM in Athens after it was announced banks in the country will not open on Monday, June 29, 2015, and account holders will face tough limits on what they can withdraw from ATMs.

LONDON– Greece won’t pay the International Monetary Fund the 1.5 billion euros it owes Tuesday.

A spokesman for Finance Minister Yanis Varoufakis told CNN the payment would not be made. Greece thus becomes the first developed economy to default to the IMF.

The default marks another dramatic step in the country’s financial collapse, and comes as Greek leaders held a series of last-ditch talks with EU officials in a bid to revive a bailout plan.

The European Commission said Greek Prime Minister Alexis Tsipras called Commission President Jean-Paul Juncker late Monday. Tsipras’ office said he had spoken to Juncker again on Tuesday, and to Mario Draghi, president of the European Central Bank.

Juncker reiterated that talks on a bailout could be revived but only if Greece accepted proposals put forward by its creditors Friday night, and if Tsipras was willing to support them in a referendum he called for July 5.

The chances of a last minute U-turn look slim. Tsipras went on Greek TV late Monday to repeat his scathing criticism of the cash-for-reform offer, saying it would enslave the Greek people.

He also hinted he may quit if Greeks voted in favor.

Greece’s existing bailout agreement with Europe is due to expire on Tuesday. Thereafter, Greece is on its own financially. Sunday’s vote could determine the country’s future in the eurozone.

German Chancellor Angela Merkel confirmed the bailout would end at midnight but said “the door is open for dialogue.”

Greek banks remain shut Tuesday and limits on cash withdrawals were in place as the country tried to stave off financial collapse before the vote.

Daily withdrawals are limited to 60 euros, or about $67.

The country’s banks have been bleeding billions of euros for months, even before the country’s debt crisis took a dramatic turn for the worse this weekend, leading to long lines at ATMs in Athens.