Greek Finance Minister Yanis Varoufakis said the country will not repay the IMF by the deadline by midnight. Greece owes over £1.5 billion in debt as part of its £220 billion aid from the European Troika during the financial crisis.
Greece had blocked all negotiations between the country and the EU, raising the stakes of a showdown that could shake the entire European economy. Greece’s exit is also on the line as the deadline looms in the last few hours.
Showing anxiety, global stock markets plunged with Asian shares dropping by 2.0% during the morning Monday.
Analysts and officials warned that should Greece leave the Euro it could be contagious but many countries believe that the exit will not affect outlying countries except those in the 19-country bloc.
Instead of agreeing to the EU’s demand for further cuts in pensions and the national budget, Greek Prime Minister Alexis Tsipras had issued a national referendum whether to vote yes or no to EU’s new policies. He had also hinted to resign from his position should the public vote “Yes” to the new austerity”.
The Greek public continues to rush ATMs, withdrawing their personal savings before the national banks close. The European Central Bunk continues to fund Greece’s national banks until a bailout deal has been reached.