Greece will not make June IMF repayment: interior minister

Greece has again threatened to default on loan repayments due to the International Monetary Fund, saying it will be unable to meet pension and wage bills in June and also reimburse €1.6bn owed to the Fund without a bailout deal with creditors.

"The money won't be given . . . It isn't there to be given," Nikos Voutsis, the interior minister, told the Greek television station Mega.

He claimed the EU and IMF were pressuring Greece to make unacceptable concessions in the current bailout talks in return for unlocking €7.2bn of aid frozen since last year.

The warning by Mr Voutsis, one of Prime Minister Alexis Tsipras' oldest political allies, comes just two weeks after Mr Tsipras made a similar threat in writing to Christine Lagarde, the IMF chief.

Mr Tsipras said Greece would miss a €750m payment in May. That payment was ultimately met, though only through tapping an emergency account held by the IMF. In effect Athens borrowed IMF assets to pay the IMF.

Predicting when Athens will run out of cash has proven a fraught affair for eurozone officials, who have been bracing for default since March.

Given the repeated warnings from Greek officials that bankruptcy is imminent, some officials have begun to disregard such threats, believing Athens is now using them as a negotiating tactic.

But a senior Greek official with knowledge of the government's funding position confirmed that Athens would be unable to make the IMF payments, which fall due in four separate instalments of more than €300m each between June 5 and June 19, unless a deal is struck.

"It's clear the June payments to the fund can't be covered without external financing," the official said. He declined to be identified.

Creditors will not disburse the loan tranche without an agreement on further Greek economic reforms.

"We won't accept blackmail that says it's either liquidity with a memorandum [the Greek term for a bailout programme] or bankruptcy", said Mr Voutsis.

The talks have picked up pace in recent days after a four-month stand-off but German chancellor Angela Merkel warned at last week's EU summit in Riga that "there is very, very intensive work to be done".

The government has ruled out a domestic default on payment obligations to Greece's 2.9m pensioners and 600,000 public sector workers, saying they have first claim on the country's shrinking resources.

People who have spoken to Mr Tsipras say he is in dour mood and willing to acknowledge the serious risk of an accident in coming weeks.

"The negotiations are going badly," said one official in contact with the prime minister. "Germany is playing hard. Even Merkel isn't as open to helping as before."

Athens is particularly worried by the IMF stance and Mr Tsipras has been attempting to convince the US to use its influence on the IMF board to soften the institutions demands.

Greek officials are also hopeful that securing a statement from eurozone ministers recognising some progress in talks will allow the ECB to ease emergency liquidity restrictions.