There is "no way" euro zone finance ministers will release funds for Greece to meet a crucial payment to the International Monetary Fund which is due by midnight (2200 GMT) to avoid a default, a euro zone official said on Tuesday.
Answering whether ministers might agree to release enough money to make the IMF payment, after holding an emergency conference call at 1700 GMT on Greece's request for an extension to its international bailout, the official responded: "No way."
Meanwhile, Chancellor Angela Merkel told lawmakers Tuesday that Germany will not enter into new aid negotiations with Athens before Greece's weekend referendum, "Before the referendum Germany can't negotiate a new request" for assistance, Merkel was quoted as saying by a lawmaker of her conservative Christian Democrats.
Greece's Finance Minister Varoufakis confirmed on Tuesday, before the expiration of the bailout program at 8 p.m., that Greece will not pay its 1.6 billion-euro ($1.87 billion) debt to the International Monetary Fund (IMF).
The country has also asked for 2-year bailout program from European Stability Mechanism to cover its financial needs with restructuring of debt.
Eurozone finance ministers announced that they will hold a conference call on Greece at 1700 GMT, just hours before Athens' EU bailout package expires at 8 p.m.
So what is now likely to happen?
The IMF will give Greece two hours before it officially declares the country could not make the payment. At the end of these two hours the IMF will still not declare that Greece has gone bankrupt.
The European Central Bank (ECB) will then declare that deposits in Greek banks are under its own guarantee, at least until the June 5 referendum result is announced.
If a 'No' comes out of the referendum, meaning the Greek people will not vote for the IMF debt to be paid, then the ECB will end its role as a guarantor and will stop helping Greek banks with supply of emergency liquidity. And the IMF will declare that Greece has gone bankrupt on the morning of June 6.
European leaders have been warning Greeks that whoever votes "no" in Sunday's referendum, they will be choosing to leave the eurozone, the bloc of countries that uses the common currency of euro. The EU financial services chief Jonathan Hill, assured people on Tuesday that Europe's financial system is strong enough to be able to cope with whatever becomes of Greece's membership of the eurozone.
Following the IMF's declaration of Greece's bankruptcy on June 6, Greece's credit note will fall substantially. But, in case a 'Yes' vote comes out of the referendum, then the EU and IMF will determine a new road map depending on Tsipras government's actions. If Tsipras government resigns, then the ECB and IMF will continue to support Greece, and credit rating agencies will not revise the country's note.
Tsipras said on a live TV program on Monday that he would resign if a 'Yes' came out of the referendum. But, still in case the Tsipras government does not resign, then the EU and IMF will take a course of action as if a 'No' vote has come out of the referendum.