Athens demands compensation for atrocities committed during World War Two, but Berlin insists issue has been settled.
Greece has told the International Monetary Fund (IMF) it will delay a key debt payment that was due on Friday and bundle all four of its June payments together and pay them at the end of the month.
The announcement came as Alexis Tsipras, the Greek prime minister, also demanded changes to tough terms from the country’s international creditors.
The IMF said on Thursday that Greece had informed the global lender that it planned to bundle four payments due in June – including the 300 million euros ($338m) payable on Friday – into a single 1.6 billion euro ($1.8bn) lump sum, which is now due on June 30.
“The Greek authorities have informed the fund today that they plan to bundle the country’s four June payments into one, which is now due on June 30,” Gerry Rice, IMF spokesperson, said, citing rules allowing debtor countries to regroup “multiple principal payments falling due in a calendar month”.
The move comes at a critical time for Greece and its IMF, European Union and European Central Bank creditors, as they push for a breakthrough in four-month negotiations to unlock 7.2 billion euros ($8.12bn) in rescue funds Greece desperately needs to honour debt payments.
With divisions still remaining on reform and austerity conditions demanded of Greece in exchange for the funds, worries of a possible default have risen with the flurry of debt repayments looming.
Tsipras told his ministers on Thursday that his government could not accept “extreme proposals” from the country’s creditors, as he briefed them on his return from Brussels.
Tsipras has been presented with a reforms deal by creditors that has sparked anger from within his leftist Syriza party.
He emerged from late-night talks with senior EU officials in Brussels saying a deal with international lenders was “within sight”.
But he rejected pension cuts and a tax increase on electricity that he said European and IMF creditors were demanding, along with other conditions to win the release of frozen loans and avert a default that could hit eurozone and world markets.
“We used an option that IMF rules offer us, and which give us additional time for negotiating,” a Greek government source said.
Greece has presented a 47-page blueprint on how to overhaul the struggling Greek economy without resorting to harsh austerity measures and cuts.