The IMF announced on Thursday that it would not extend a June 30 date for cash-strapped Greece to repay it 1.7 bln dollars, with a spokesman also saying the country would be in arrears to the Fund.

While the SYRIZA government continued to hammer away at a cash-for-reforms deal with institutional creditors in Brussels, from Washington D.C. spokesman Gerry Rice merely reminded that a non-payment would cause IMF Chief Christine Lagarde to notify the IMF’s executive board.

More ominously, he said this could trigger cross-default provisions in euro zone bailout loans issued to Greece.

According to the WSJ, Rice’s comments dampened hopes in certain market circles that any Greek default to the IMF wouldn’t immediately fuel financial turmoil outside Greece.