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 ATHENS, June 29 Greece will not pay a 1.6 billon euro loan installment due to the International Monetary Fund on Tuesday, a Greek government official confirmed on Monday, highlighting the depth of the financial crisis facing the country. 
 
 Ministers have said repeatedly that Greece would not have the funds to pay the IMF unless it reached a deal with creditors to unlock 7.2 billion euros in bailout funds frozen while the two sides wrestled over the conditions demanded of Athens. 
 
 After talks broke down at the weekend, triggering the imposition of capital controls on Greek banks, it became a virtual formality that the IMF's June 30 deadline would not be met. 
 
 IMF Managing Director Christine Lagarde earlier this month said Greece would be in default as of July 1 if it failed to the pay the money, though an IMF spokesman last week said a missed payment would classify Greece as "in arrears". 
 
 The missed payment would bring Greece closer to an exit from the euro zone currency if it prompted the European Central Bank to cut off emergency funding that Greek banks rely on. But the ECB is expected to maintain that lifeline at least for this week and analysts say Greece could default and remain in the euro. 
 
 Despite the shock of a default by a euro zone country, Greece's fate is likely to remain unchanged until after a snap referendum on July 5 on bailout terms presented by creditors in exchange for aid. 
 
 Euro zone policymakers have warned Greeks that a "no" vote against the aid package would be tantamount to a rejection of engagement with creditors and point towards a euro zone exit. (Reporting by Lefteris Papadimas, writing by Deepa Babington; editing by Philippa Fletcher) ||||| Merkel and Hollande will meet for crisis talks and the ECB faces a crucial decision over its funding lifeline after Greece rejected austerity by 61% to 39% 
 
 European leaders were scrambling for a response on Monday after a resounding no from Greek voters in a momentous referendum on austerity which could send the country crashing out of the eurozone. 
 
 
 
 With Europe’s financial markets set to follow Asia’s overnight lead by going sharply into the red, German chancellor Angela Merkel was to meet with French leader Francois Hollande in Paris after Greece overwhelmingly rejected international creditors’ tough bailout terms. 
 
 Greek referendum: Asian markets fall sharply after Greece no vote – live Read more 
 
 The pair spoke by telephone late Sunday, declaring the referendum decision must “be respected” and calling for an emergency eurozone summit which the EU president, Donald Tusk, said would be held on Tuesday. 
 
 A flurry of other meetings will also be held on Monday as European leaders sized up the implications of the vote, a victory for Greece’s radical prime minister, Alexis Tsipras, who insisted it did not mean a “rupture” with Europe. 
 
 With the ramifications still unclear and some analysts putting the chances of Grexit at very high, the European commission head, Jean-Claude Juncker, was to hold a teleconference on Monday morning with European Central Bank chief, Mario Draghi, Tusk and Jeroen Dijsselbloem, head of the eurogroup of finance ministers. 
 
 Meanwhile German and French finance ministers were set for talks beginning in Warsaw at 9am BST, while the euro working group of top treasury officials will meet in Brussels. 
 
 Britain said it would do “whatever is necessary to protect its economic security” and David Cameron would be chairing a meeting on Monday to review its reaction, a government spokesman said. 
 
 “This is a critical moment in the economic crisis in Greece,” a Downing Street spokesman said. “We will continue to do whatever is necessary to protect our economic security at this uncertain time. We have already got contingency plans in place and later this morning the prime minister will chair a further meeting to review those plans in light of yesterday’s result.” 
 
 In Athens, Greece’s controversial finance minister Yanis Varoufakis announced that he was standing down immediately after pressure from the country’s “assorted partners”. 
 
 He said he hoped his decision would make it easier for Tsipras to negotiate a new deal with other European leaders. 
 
 
 
 Earlier on Monday morning, Tsipras met the Greek president, Prokopis Pavlopoulos, and asked him to convene a meeting of Greek political party leaders. “We must move forward immediately with negotiations … a strong national front must be created to seek an immediate solution,” Tspiras told Pavlopoulos after the vote. 
 
 
 
 Tsipras said the creditors – the ECB, the European commission and the International Monetary Fund (IMF) – would now finally have to talk about restructuring Greece’s huge debts. 
 
 “This time, the debt will be on the negotiating table,” he said. 
 
 As the magnitude of the result became clear – the margin was an unexpected 61.3% to 38.7% – thousands of no voters began pouring into Syntagma Square in front of the parliament in Athens to celebrate, waving Greek flags and chanting: “No, no.” 
 
 On Sunday night, speaking before his resignation, Varoufakis said the no vote was a rejection of the “iron cage” of the eurozone. 
 
 “Today’s no is a big yes to democratic Europe. A no to a vision of the eurozone as a boundless iron cage for its people. From tomorrow, Europe, whose heart tonight beats in Greece, starts healing its wounds, our wounds.” 
 
 
 
 The sweeping victory for Tsipras, who challenged the might of Germany, France, Italy and the rest of the eurozone, represented a nightmare for the mainstream elites of the EU. With Greek banks closed, withdrawals limited, capital controls in place and the country rapidly running out of cash, emergency action will be needed almost immediately to avoid a likely banking collapse. 
 
 But it is not clear whether the European Central Bank will maintain a liquidity lifeline to Greece and whether the creditor governments of the eurozone will sanction instant moves to salvage Greece’s crashing financial system. 
 
 
 
 Germany’s vice-chancellor and social democratic leader, Sigmar Gabriel, said Tsipras had burned his bridges with the rest of the eurozone. But the Greek leader believes he has strengthened his negotiating hand. 
 
 
 
 Dijsselbloem, who chairs the eurozone group of finance ministers, said the result was “very regrettable” for the future of Greece. “For recovery of the Greek economy, difficult measures and reforms are inevitable. We will now wait for the initiatives of the Greek authorities,” he said. 
 
 
 
 The Greek vote is a huge blow to EU leaders, particularly Merkel, who has dominated the crisis management through her insistence on fiscal rigour and cuts despite a huge economic slump, soaring unemployment and the immiseration of most of Greek society. 
 
 
 
 “The failure of the euro means the failure of Merkel’s [10-year] chancellorship,” said the cover of the latest issue of Der Spiegel, the German weekly. It depicted her sitting atop a Europe in ruins. 
 
 
 
 Greek referendum result: what happens next? Read more 
 
 On the markets overnight, Japan’s Nikkei stock average was down 2.2% and in Hong Kong the Hang Seng was down more than 3%. 
 
 
 
 In Australia, around $A30bn was wiped off the value of shares as the country’s benchmark ASX200 index fell almost 1.5% at the opening. 
 
 Oil prices also fell sharply on Monday amid worries about poor demand growth amid global oversupply. Brent futures were down over a percentage point at $59.56 per barrel. 
 
 However, the single currency held up against the dollar, after dropping in the immediate wake of the vote. It was at $1.1044 in Tokyo trade, ticking up from $1.0963 soon after early results of the bailout reforms vote were known. 
 
 Shinya Harui, currency analyst at Nomura Securities in Tokyo, said the common currency was holding up as investors “assess the spill-over risks in case of a Greek exit from the eurozone”, adding: “I personally think the chance (of the Greek exit) is very high, at around 70-80%.” 
 
 
 
 In Athens the mood was jubilant. “Spain, and then Portugal, should follow this path. We’re for a Europe of the people,” said one no supporter, Giorgos, 25, brushing off concerns the result could see the debt-laden country plunge further into the financial mire. 
 
 But the mood of jubilation was not shared by all no voters, with some saying they had been confronted with an impossible choice. 
 
 But even “yes voters were ambivalent about their camp’s apparent defeat. 
 
 Paris, a 41-year-old dentist, said she was resigned rather than sad because, with the dire state of Greece’s finances and Tsipras in power, there was “no real hope either way”. 
 
 Greece’s conservative opposition chief, Antonis Samaras, announced his resignation as the early results of the referendum became clear on Sunday. His New Democracy party had campaigned for a yes result in the referendum. 
 
 Greece is teetering on the brink of financial collapse. If it does not receive cash and loans soon from European institutions, it could still be forced to resort to government IOUs or a return to the drachma to keep its economy running. 
 
 Last Tuesday, the country defaulted on a €1.6bn (£1.1bn) repayment to the IMF, becoming the first developed country to fall into arrears to the institution. As a result, it is cut off from further IMF financing until it settles the amount. 
 
 The same day, the last bailout for Greece ran out, despite Tsipras’s appeals for it to be extended until the referendum was over. 
 
 Greece was officially declared in default on Friday by the European Financial Stability Facility, which holds €144.6bn of Greek loans. 
 
 Greek banks are now reportedly almost illiquid after a run by panicked customers in the runup to the referendum, which Tsipras abruptly called on 27 June to break an impasse with the creditors. 
 
 A week-long closure of the banks and capital controls that included restricting daily ATM withdrawals to just €60 and blocking money transfers abroad slowed the outflow. 
 
 But if the ECB does not inject emergency euros into Greece’s banks in the next one or two days, more businesses will go belly up and ordinary Greeks will suffer. 
 
 Government spokesman Gabriel Sakellaridis said late on Sunday that the Bank of Greece was asking for the ECB to provide money under its Emergency Liquidity Assistance mechanism. ||||| Hopes fade for quick solution to thwart Grexit as Eurogroup finance chiefs show incredulity as new Greek finance minister arrives without detailed proposals 
 
 The Greek government has been told by its eurozone partners not to expect debt relief any time soon, amid fading hopes of decisive action to stop the country tumbling out of the currency union. 
 
 
 
 Arriving at an emergency summit of eurozone leaders, Angela Merkel said there was no clear basis to negotiate with Athens after Greek voters rejected an EU bailout plan in a referendum on Sunday. The German chancellor warned that time was running out. “It is not a matter of weeks anymore, it is a matter of days.” 
 
 Eurozone finance ministers meeting ahead of the summit made it clear they were waiting on Athens to make the first move and were in no hurry to discuss debt relief. 
 
 Diplomatic niceties were abandoned as it emerged Greece’s new finance minister Euclid Tsakalotos had not come armed with detailed proposals. 
 
 “[With] the Greek government it is every time mañana,” said Lithuania’s president Dalia Grybauskaitė, one of the Greek government’s most tough-talking critics. “It can always be mañana every day.” 
 
 Greek banks are almost out of cash and some Eurozone figures are already saying that Grexit is the only option for the debt-ridden country. 
 
 
 
 The head of Latvia’s central bank told domestic radio that the “brave” Greek nation had “voted itself out of the eurozone”. 
 
 Angela Merkel must act now for Greece, Germany and the world | Letters from Thomas Piketty, Jeffrey Sachs and others Read more 
 
 The president of the European commission, Jean-Claude Juncker, said he was not in favour of a Greek exit from the eurozone, but dampened hopes of a breakthrough from the summit. “What we are going to do today is to talk to each other and restore order,” he said. 
 
 Tsakalotos, the Oxford-educated economics professor, who was sworn in as Greek finance minister on Monday night, arrived at Tuesday’s meeting without talking to reporters. 
 
 
 
 Neither did he bring any detailed proposals – an omission that caused incredulity among other eurozone governments. Malta’s prime minister Joseph Muscat said “the absence of a concrete proposal” wouldn’t help the eurozone leaders’ summit. 
 
 Joseph Muscat (@JosephMuscat_JM) The absence of a concrete proposal by #Greece government doesn't help this evening's #Eurozone leaders' meeting -JM 
 
 Greece will a make formal proposal on Wednesday to tap the EU’s €500bn bailout fund, the European stability mechanism, said the chair of the Eurogroup, Jeroen Dijsselbloem, after the meeting ended with scant results. Finance ministers will discuss the idea by phone. 
 
 “All of this has to be done in a matter of days. We have very little time,” he said. 
 
 The leaders of France and Germany said they expected Greece to come up with “serious and credible proposals” at today’s summit. 
 
 The demand was echoed by finance ministers, who stressed they wanted to see the Greek government sign up to reforms. Several made it clear they would not support any write-off of Greek debt. 
 
 “We are not in the business of renegotiating debt,” said Finland’s finance minister, Alexander Stubb. “That was already done in 2011 and 2012,” referring to restructuring of Greek debts that imposed heavy losses on private creditors. 
 
 
 
 Stubb said Finland’s commitments to Greece had proved to be more than anyone ever expected, totalling 10% of the Finnish government budget. 
 
 The European commission, the guardian of EU law, was openly split. Valdis Dombrovskis, the Latvian commissioner in charge of the euro, said a Greek exit from the eurozone could not be excluded. Pierre Moscovici, the French commissioner in charge of the economic policy, struck a different note, saying that Grexit would be a terrible collective failure. 
 
 Juncker blamed the Greeks for walking out of talks and said it was up to Athens to come up with proposals that would allow Europe to get out of this situation. 
 
 
 
 The depths of mistrust were highlighted by Latvia’s finance minister, Jãnis Reirs, who said his compatriots were surprised at the referendum result. “Latvian people do not understand Greek people,” he said. 
 
 As talks in Brussels grind on, Greek banks remain closed and it is far from clear they will be able to reopen on Thursday, when an extended bank holiday is due to end. 
 
 
 
 Greece has to find €3.5bn to meet a debt repayment to the European Central Bank in two weeks’ time (20 July). Failure to make the payment would leave the ECB with little choice but to declare Greek banks insolvent and cut off all emergency aid, almost certainly triggering a eurozone exit. 
 
 But many analysts suspect Greek banks cannot last this long without financial help. 
 
 The European Central Bank raised the pressure on Greek banks on Monday night by tightening access to emergency credit. The Frankfurt-based institution has pumped €89bn (£63bn) into the Greek financial system in recent months, but Greek banks can only tap this emergency aid by putting up collateral, such as Greek government bonds. 
 
 The bank said on Monday it was “adjust[ing] the haircuts accepted on collateral”, meaning that Greek assets are now deemed more risky, to secure smaller amounts of emergency funds. 
 
 “Restoration of liquidity in the Greek banking system [is] an immediate priority,” Greek president Prokopis Pavlopoulos wrote in a letter to the European council president Donald Tusk. 
 
 
 
 The Greek prime minister, Alexis Tsipras, pressed for capital controls to be lifted when he spoke to the head of the ECB, Mario Draghi, on Monday. After a hectic day of meetings with Greek party leaders, Tsipras also spoke to Christine Lagarde of the International Monetary Fund. She told him the IMF was no longer able to provide money to Greece until it clears its arrears, following last week’s default on a €1.6bn loan repayment. 
 
 
 
 Analysts at Capital Economics said Greece’s creditors may soon have to “accept the inevitable” and cut Greece loose. 
 
 
 
 “Greece and its creditors may yet find a way to step back from the brink. But without major debt relief, any near-term deal looks likely just to put off the inevitable for a bit longer,” wrote chief European economist Jonathan Loynes. 
 
 “Meantime, Greece’s economic and fiscal position will continue to worsen and the eurozone’s policymakers will devote yet more time and effort to what looks increasingly like a hopeless cause. We don’t say it at all lightly. But it might well be time to let Greece go.”
– As predicted, Greece doesn't have the funds to pay back a $1.8 billion euro loan installment by tomorrow's International Monetary Fund deadline, a government official there confirmed today—meaning the country may now be one step "closer to an exit from the euro zone currency," as Reuters puts it. Echoing that: Standard & Poor's today cut Greece's credit rating by one notch further into junk status, and put the chance of Greece exiting the eurozone at 50-50, reports the AP. S&P put out a statement saying that the decision to hold a July 5 referendum suggests the country "will prioritize domestic politics over financial and economic stability, commercial debt payments, and eurozone membership." European leaders are urging Greeks to vote "yes" in that referendum on bailout conditions, the Wall Street Journal reports. "You shouldn't commit suicide because you're afraid of dying," the European Commission president urged Greek citizens, per the newspaper. Although the European Central Bank is expected to cut off the emergency funding required to keep Greece's banks afloat following the missed payment, analysts tell the news agency they think the ECB will keep money flowing at least through this week.