Eurozone finance ministers have rejected a Greek request to extend a bailout programme beyond 30 June.
A Eurogroup statement said Greece had broken off negotiations over a new bailout deal “unilaterally”.
Late on Friday, Greek PM Alexis Tsipras called a surprise referendum for 5 July over the terms of any new deal.
French Finance Minister Michel Sapin stressed after the Eurogroup talks that all of its members wanted Greece to remain in the eurozone.
“This is not a Greek exit from the euro zone,” he told reporters. “The 18 countries, apart from Greece, all said clearly that Greece was in the euro and should remain in the euro whatever the difficulties of the moment.”
Crisis talks: As they happened
Eurogroup head Jeroen Dijsselbloem said finance ministers would reconvene to discuss the consequences of the latest developments, and “prepare for what’s needed to ensure the stability of eurozone remains at its high level”.
It would be up to the European Central Bank (ECB) to decide whether to continue providing emergency liquidity funding to the Greek banking system, he added.
The ECB said it was “closely monitoring developments” and would hold a meeting in due course to discuss the situation.
It’s never over till it’s over. But it feels like the end is perilously close. The breakdown in talks between Greece and its creditors has to be seen as a failure.
It wasn’t supposed to happen like this. It is also a massive gamble on all sides, and a possible turning point in the history of the eurozone. There will still be those working feverishly behind the scenes for compromise, but in effect neither side has blinked yet.
When the Greek government thought it had made substantial concessions at the beginning of the week, the creditors said it simply wasn’t enough. And while no-one can say for certain that Greece will leave the eurozone, this is already uncharted territory.
Much will depend on the outcome of the referendum called by PM Alexis Tsipras, if it takes place on schedule. And much will also depend on the European Central Bank – and whether it believes it can still allow funds to flow, to prevent banks in Greece from collapsing.
ECB faces huge decision
Greek Finance Minister Yanis Varoufakis said the Eurogroup’s refusal to extend the bailout could permanently damage the credibility of the group.
He said that what had been proposed to Greece “did not contain any plan for giving, instilling hope in investors, both Greek and non-Greek, in consumers, in depositors”.
“In these crucial moments, the Greek government is fighting for there to be a last minute deal by Tuesday,” he said.
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Media caption “We heard some rumours that the banks will not be giving any money from Monday”
Throughout the ups and downs of the recent negotiations, Greeks have by and large resisted the urge to withdraw money from their accounts, pinning their hopes on a last minute deal with the country’s creditors.
But as the deadline for Greece’s €1.6bn payment to the IMF looms, and with Mr Tsipras calling for a referendum next week, lines have begun to form outside ATMs and bank branches in Athens.
Some customers (U.S. GI’s) were given a ticket number and told to come back in a few hours. One man told me he was 170th in line. “The game is over,” said Peter, one of those queuing. “Greece is going into uncharted waters, and the banks will be closed on Monday, I suspect.”
Anxiety is mounting in Athens. “Everybody’s really scared,” Elena, a woman in her 20s, tells me as she waits to withdraw cash. “We need to have enough money to last the week.”
“How does the Greek government think that it will survive and deal with its problems in that period? I do not know,” he said.
In Greece, queues have formed outside banks amid concerns that the Greek central bank might start restricting withdrawals.
Deputy Prime Minister Yanis Dragasakis tweeted that the government would continue working closely with the ECB and Bank of Greece “for the stability of the country’s banking system”.
Greece owes roughly €340bn, mostly to its eurozone partners. Because it can no longer borrow from the international money markets, it is dependent on the eurozone and IMF to keep its banks functioning.
“A graffito in Athens reads “Mrs Merkel we still love you”
….Well, politik baseret paa emotionel feelings from the left to the right are usually connected to other hidden values. I do remember another version from Greece – “Merkel GO HOME” !