A Greek government official has confirmed Greece will be unable to make a EUR 1.6 B debt payment due to the International Monetary Fund (IMF) on Tuesday, Reuters reported on Monday.

The IMF has said that Greece will immediately be in arrears if it fails to make the debt repayment.

Eurozone finance ministers on Saturday rejected Greece’s request for an extension to Greece’s bailout programme which is due to expire on Tuesday. 

Despite the shock of a default by a eurozone country, Greece's fate is likely to remain unchanged until after a snap referendum on 5 July 5 on bailout terms presented by creditors last week.

The government will ask Greeks to approve or reject the terms set by the country's creditors in exchange for extending the existing bailout program so that it can continue to access EUR 7.2 B in rescue loans. Greece's Prime Minister Alexis Tspiras has urged his compatriots to vote against the proposed measures.

However, it's unclear whether a referendum will matter if Greece doesn't get an extension to the existing bailout programme on Tuesday. The programme expires on Tuesday, the same day the IMF debt payment is due.

In order for Greece to get an extension on its bailout, the European Central Bank has insisted the government in Athens agree to more austerity measures. The latest proposal calls for further tax hikes, alongside with spending cuts in the area of some EUR 8 B.