Greece declared in default ahead of referendum

Athens

Greece was officially declared in default today, injecting even more urgency into a make-or-break weekend referendum that new polls suggested was too close to call. 

The fund providing Greece's financial lifeline declared "an event of default by Greece".

The European Financial Stability Facility added, though, that it had decided to not immediately demand repayment of its loans -- a step that analysts say could have triggered sudden "Grexit", or Greece's exit from the eurozone.

The news will come as a fresh shock to Greece's 11 million people, and will hang over two major, rival rallies taking place in Athens late Friday seeking to galvanise 'Yes' and 'No' support for Sunday's referendum. 

The European Financial Stability Facility (EFSF) declared "an event of default by Greece", but added that it had "decided not to request immediate repayment of its loans nor to waive its right to action."

The EFSF, which helps support eurozone countries in difficulty, handles the debt owed by Greece to eurozone governments and holds outstanding Greek loans of 144.6 billion euros ($160 billion).

EFSF boss Klaus Regling said the body was "Greece’s biggest creditor."

"This event of default is cause for deep concern," he added, ahead of Sunday's referendum on Greece's bailout package.