The International Monetary Fund (IMF) confirmed Thursday that Greece will be bundling four debt repayments due in June at the end of the month, averting the possibility of a Greek default Friday.
"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," IMF spokesman Gerry Rice said, citing rules allowing debtor countries to regroup "multiple principal payments falling due in a calendar month."
Greece`s first 300 million euro ($338 million) payment had been due on Friday, with cash-strapped Athens slated to hand another 1.3 billion euros over on later dates in June.
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 ($8.12 billion) in bailout funds Athens desperately needs to honour debt payments.
With divisions still remaining on reform and austerity conditions demanded of Athens in exchange for the funds, worries of a possible default have risen with the flurry of debt repayments looming.
"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.
Creditors, meanwhile, have tabled a rival plan drawn up without Greece at a meeting in Berlin on Monday attended by the leaders of Germany and France.
Discussions that have taken place throughout the week are slated to resume on Friday.