Greece and the Eurozone have been unable to reach an agreement ahead of a bailout deadline which quickly approaches on June 30th. If negotiations fail, Greece could leave the European Union and ultimately face economic collapse.

The situation is already causing a dash for cash in the debt strapped country.

Bloomberg reports:

Greeks Line Up at Banks and Drain ATMs as Tsipras Calls Vote

Some Greek banks were beginning to limit cash transactions as hundreds of people lined up outside branches and drained cash machines after Prime Minister Alexis Tsipras called a referendum that could decide his country’s fate in the euro.

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. A central bank spokesman said it was making efforts to supply money to the system.

Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.

Greek prime minister Alexis Tsipras has called for a referendum which pleased members of his party but has angered Eurozone leaders. Watch this recent video report from the AFP:

CBS News asks the most important question:

What happens if Greece defaults?

Although Greece’s economy is small, accounting for just around 2 percent of the eurozone’s overall GDP, the ramifications of the country’s collapse and exit from the euro for the U.S. cannot be ignored, according to experts. For one thing, the European currency would tank, making U.S. exports to the European Union, a key market for many multinational companies, more expensive.

In a worst-case scenario, the U.S. economic recovery could be derailed, and Russia’s influence in Europe might grow, according to experts.

The European Central Bank (ECB) might have to take action to prevent the Greek crisis from spreading to the rest of Europe, particularly in Italy, the third-largest economy in the eurozone, which has its share of economic problems.

“While the euro can very well survive without Greece, it is difficult to imagine how the euro could survive if Italy were to eventually follow Greece out of the euro,” according to Lachman of the American Enterprise Institute.

Featured image via YouTube.