Greece to miss IMF debt payment and bailout to expire

ATHENS (AP) - Greece is set to become the first developed nation to not pay its debts to the International Monetary Fund on time, as the country sinks deeper into a financial emergency that has forced it put a nationwide lockdown on money withdrawals.

Greece owes the IMF about 1.6 billion euros ($1.9 billion) by the end of Tuesday but has run out of money and after five months of talks with creditors, has no prospect of getting new rescue loans. Finance Minister Yanis Varoufakis, asked whether Greece would meet Tuesday's repayment, replied: “no.”

The European part of Greece's international bailout expires at the end of Tuesday, and with it any possible access to the remaining rescue loans the country needs to pay its debts.

“The program runs out tonight, at exactly midnight central European time,” German Chancellor Angela Merkel said in Berlin. “I know of no solid indications to the contrary.”

The heightened crisis, which peaked over the weekend after Prime Minister Alexis Tsipras called a referendum on creditor proposals for reforms in return for bailout loans, has increased fears the country could very soon fall out of the euro currency bloc.

If Greece doesn't repay the IMF by the deadline, it will be officially in arrears and will no longer have access to funding from the body until it clears its arrears. This, IMF chief Christine Lagarde told the BBC last week, has “never happened in the case of an advanced economy.”

Straight after the referendum call, in which the government is advocating a “no” vote, Greeks began rushing to ATM machines. The referendum is set for Sunday and the government declared all banks will remain shut for at least a week. Greeks have been limited to cash withdrawals of 60 euros ($67) per day.

Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run.