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Greece slipped deeper into its financial abyss after the bailout program it has relied on for five years expired at midnight Tuesday and the country failed to repay a loan due to the International Monetary Fund.
With its failure to repay the roughly 1.6 billion euros (US$1.8 billion) to the IMF, Greece became the first developed country to fall into arrears on payments to the fund. The last country to do so was Zimbabwe in 2001.
After Greece made a last-ditch effort to extend its bailout, eurozone finance ministers decided in a teleconference late Tuesday that there was no way they could reach a deal before the deadline.
“It would be crazy to extend the programme,” said Dutch Finance Minister Jeroen Dijsselbleom, who heads the eurozone finance ministers’ body known as the eurogroup. “So that cannot happen and will not happen.”
“The programme expires tonight,” Dijsselbleom said.
The brinkmanship that has characterised Greece’s bailout negotiations with its European creditors and the IMF rose several notches over the weekend, when Prime Minister Alexis Tsipras announced he would put a deal proposal by creditors to a referendum on Sunday and urged a “No” vote.
The move increased fears the country could soon fall out of the euro currency bloc and Greeks rushed to pull money out of ATMs, leading the government to shutter its banks and impose restrictions on banking transactions on Monday for at least a week.
But in a surprise move Tuesday night, Deputy Prime Minister Yannis Dragasakis hinted that the government might be open to calling off the popular vote, saying it was a political decision.
The government decided on the referendum, he said on state television, “and it can make a decision on something else.”
It was unclear, however, how that would be possible legally as Parliament has already voted for it to go ahead.
Greece’s international bailout expired at midnight central European time, after which the country lost access to billions of euros in funds. At the same time, Greece said it would not make the 1.6 billion euros payment to the IMF.
Watch: Greece misses 1.5 billion euro IMF payment

With its economy teetering on the brink, Greece suffered its second sovereign downgrade in as many days when the Fitch ratings agency lowered it further into junk status, to just one notch above the level where it considers default inevitable.
The agency said the breakdown of negotiations “has significantly increased the risk that Greece will not be able to honour its debt obligations in the coming months, including bonds held by the private sector.”
Fitch said it now considered a default on privately-held debt “probable.”
Hopes for an 11th-hour deal were raised when the Greek side announced it had submitted a new proposal Tuesday afternoon, and the eurozone’s 19 finance ministers held a teleconference to discuss it.
But those hopes were quickly dashed.
German Chancellor Angela Merkel said she ruled out further negotiations with Greece before Sunday’s popular vote on whether to accept creditors’ demands for budget reforms.
“Before the planned referendum is carried out, we will not negotiate over anything new,” the DPA news agency quoted Merkel as saying.
On the streets of Athens, long lines formed again at ATM machines as Greeks struggled with restrictions on banking transactions.
Under credit controls imposed Monday, Greeks are now limited to ATM withdrawals of 60 euros ($67) a day and cannot send money abroad or make international payments without special permission.


Greece sliding into abyss as it misses crucial repayment and defaults on IMF loan

Greek protesters in favour of staying in the eurozone and the EU rally outside parliament in Athens on Tuesday. Photo: EPA

Greek protesters in favour of staying in the eurozone and the EU rally outside parliament in Athens on Tuesday. Photo: Xinhua

Update | Greece sliding into abyss as it misses crucial repayment and defaults on IMF loan