MercoPress. South Atlantic News Agency

Greek banks closed and Tsipras takes the dispute with ECB and IMF to the brink

Greece is due to make a €1.6bn payment to the International Monetary Fund (IMF) on Tuesday - the same day that its current bailout expires.

Greek banks are to remain closed and capital controls will be imposed, Prime Minister Alexis Tsipras announced. Speaking after the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks, Tsipras underlined Greek deposits were safe.

 Greece is due to make a €1.6bn payment to the International Monetary Fund (IMF) on Tuesday - the same day that its current bailout expires. Greece risks default and moving closer to a possible exit from the Euro zone.

Greeks have been queuing to withdraw money from cash machines over the weekend, and the Bank of Greece said it was making “huge efforts” to keep the machines stocked. The announcement of bank closures in Greece for Monday and a limit of 60 Euros for withdrawals from ATM cash machines when they reopen was made on Sunday.

Greek banks are expected to stay shut until 7 July, two days after Greece's planned referendum on the terms it had been offered by international creditors for receiving fresh bailout money. The Athens stock exchange will also be closed on Monday

Euro-zone finance ministers blamed Greece for breaking off the talks, and the European Commission took the unusual step on Sunday of publishing proposals by European creditors that it said were on the table at the time.

But Greece described creditors' terms as “not viable”, and asked for an extension of its current deal until after the vote was completed.

“[Rejection] of the Greek government's request for a short extension of the program was an unprecedented act by European standards, questioning the right of a sovereign people to decide,” Tsipras on Sunday said in a televised address.

“This decision led the ECB today to limit the liquidity available to Greek banks and forced the Greek central bank to suggest a bank holiday and restrictions on bank withdrawals.”

The Greek prime minister said that wages and pensions, as well as bank deposits, were guaranteed. He also said he had sent a new request for an extension to the bailout. “I am awaiting their immediate response to a fundamental request of democracy,” added.

Meantime the German and British governments advised tourists to take plenty of Euros to Greece in case they had trouble withdrawing money.

In early trading on Monday in Asian markets the 19-nation Euro fell as much as 1.9% to $1.0955, its lowest level in almost a month, in early trade in Tokyo on Monday. Against the yen, the common currency dropped more than 3% to 133.80 yen, a five-week low. The Swiss franc added 1% versus the Euro, while the UK pound rose 1.1%.

German Chancellor Angela Merkel and US President Barack Obama spoke about the crisis by phone, agreeing that it was “critically important” to help Greece remain in the Euro zone, the White House said.

French Prime Minister Manuel Valls told French TV: “We must do everything so that Greece stays in the Euro zone.

”Doing everything that means respecting Greece and democracy, but it's also about respecting European rules. So Greece needs to come back to the negotiating table.''

Sunday's developments come after several days of particular turbulence in Greece's debt crisis. The current ceiling for the ECB's emergency funding - Emergency Liquidity Assistance (ELA) - is €89bn. It is thought that virtually all that money has been disbursed.