German Chancellor Angela Merkel ruled out an immediate return to debt talks as Greece became the first advanced economy to miss payment to the International Monetary Fund and its European bailout also expired.

While Merkel rejected talks before a July 5 referendum called by Greek Premier Alexis Tsipras on further budget cuts, euro-area finance ministers signaled the deadlock may be thawing. As capital controls ration bank withdrawals and pensions, Greek society is feeling the pain.

“We’ll negotiate about absolutely nothing before the planned referendum is held,” Merkel told reporters in Berlin.

The exchange between the chief antagonists marked the latest chapter of the crisis as Greece failed to make a payment of about $1.7 billion to the global lender of last resort, joining the ranks of Sudan and Zimbabwe.

The Greek vote, which leaders in Berlin and Paris have labeled a decision on remaining in the euro, could also determine whether the European Central Bank withdraws its emergency loans. That would further decimate an economy that’s already shrunk by about a quarter in five years.

“A ‘no’ in the referendum would make it almost impossible for the IMF and for Europe to provide support for Greece beyond what would de facto be humanitarian relief,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Greece would then have to issue IOUs as a first step to a Grexit.”

Two-Year Plan

Tsipras’s plan would cover all the country’s financing needs for two years. It failed to include any economic-reform measures and proposed a restructuring of Greece’s crushing debt load, spelling its likely rejection.

Euro-area finance ministers, who discussed the plan in a conference call, will examine it on another one at 11:30 a.m. Brussels time Wednesday. Their comments suggested they were open to compromise, though they stuck by their opposition to debt relief and demands for economic reform.

On first look, the plan appeared to be a non-starter, according to three officials. In an effort to get talks on track, Greece has agreed to offer more information and said that Greece might change its referendum terms and recommendation, another official said.

“It strikes me as just another brinkmanship tactic,” said Ben May, an economist at Oxford Economics in London. “It could arguably be the starting point for bringing Greece back from the brink, but it’s going to be a pretty bumpy ride.”

Referendum Call

On the second day of capital controls, the stress is beginning to show among Greeks, who are limited to 60 euros ($67) a day of withdrawals under an order issued at 3 a.m. on Monday. The union for National Bank of Greece SA workers appealed for a police presence in the next three days at branches open for the payment of pensions.

For now, at least, markets suggest investors are confident in policy makers’ efforts to quarantine Athens during more than five years of crisis fighting and two bailouts.

The euro is trading at $1.114, about the same as before negotiations collapsed on June 26. Bonds rose in Spain, Portugal and Italy, which sold 6.8 billion euros ($7.6 billion) of debt on Tuesday.

The latest twists are unlikely to be the last.

German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece would stay in the euro for the time being even if Greek voters reject austerity in the referendum, according to three people present.

“This week is going to be very psychologically tense, very emotional,” said Othon Anastasakis, a professor of European politics at the University of Oxford. “There are going to be various arguments from both sides.”