New | Time running out for Greece to forge deal on reforms

Time is running out for Greece to reach an agreement on reforms with lenders and there will be no further funds for Athens without it, the head of the European Stability Mechanism Klaus Regling told Germany’s Bild newspaper on Tuesday.

"There is little time left," Regling told the best-selling newspaper. "That’s why we’re working day and night for an agreement. Without an agreement with the creditors, Greece will not get any new loans. Then there’s a threat of insolvency. There are a lot of risks contained in that," he added.

"Even missing a payment to the IMF would be dangerous. That would have an effect on other lenders like us. On the other hand, the rescue fund can only extend loans when reforms are implemented. That is also the case now and that’s the only way Greece will be able to restore its economy’s fiscal health," he said.

The Greek government said on Monday it intends to make good on its debt obligations but needs aid urgently to be able to do so after several senior officials insisted Athens had no money to pay a loan instalment falling due next week.

Shut out of bond markets and with bailout aid locked, Greece is running out of cash to pay its bills. It must repay four loans totalling 1.6 billion euros (US$1.76 billion) to the International Monetary Fund next month, starting with a 300 million euro payment on June 5 that is seen as the next crunch point for state coffers.

A growing list of senior members of the government have openly said Athens does not have the means to pay the IMF, and would prioritise paying civil servants and pensioners instead.