Greece gained some breathing space in its battle to stay solvent on Wednesday after it met the deadline for a €200m (£149m) debt payment and the European Central Bank extended its lifeline to the country’s banking system.

The International Monetary Fund confirmed it had received the repayment, allowing the debt-stricken country’s rescue package to remain in place until next week when another €750m is due to the Washington-based organisation.

In a separate boost for Athens, the ECB raised the ceiling on aid to Greek banks under its Emergency Liquidity Assistance programme by €2bn, to €78.9bn.

Amid fears of a bank run, the ECB has increased the limit gradually, keeping up the pressure on the Syriza-led government to strike a deal with its creditors.

The lending trio of the ECB, European Commission and IMF issued a formal statement on Wednesday presenting a united front, after reports that the IMF was pressing its partners to write off part of Greece’s debt.

The three institutions said they “share the same objective of helping Greece achieve financial stability and growth,” and would work towards “concrete” progress at Monday’s planned meeting of eurozone finance ministers.

But earlier in the day, Jeroen Dijsselbloem, the Dutch finance minister and chair of the 19-member Eurogroup, had said many issues remained unresolved between Greece and its lenders, and agreement at next Monday’s meeting of eurozone finance ministers was now not possible. The Greek government had hoped to reach a deal that would have released €7.2bn in vital bailout funds, in exchange for economic reforms.

Speaking after talks in Paris with French finance minister Michel Sapin, Dijsselbloem said: “Since the last Eurogroup quite a bit of progress has been made ... I’m getting some positive reports from the talks in Brussels. Still lots of issues have to be solved, have to be deepened more, with more details, so there will be no agreements on Monday – we have to be realistic.”

He added: “But there is certainly a more positive outlook to reach that deal than there was some weeks ago.”

Fears that Greece would run out of funds this week and miss a €2bn public sector pay and pensions bill alongside the IMF payment proved unfounded after the finance ministry scrambled together the funds. Athens has amassed a war chest to maintain debt repayments following a boost in tax returns, steep public spending cuts and the re-allocation of regional and local authority reserves to the central finance ministry.

A joint statement from the EU president, Jean-Claude Juncker, and the Greek prime minister, Alexis Tsipras, said discussions were ongoing over reforms to the Greek pension system.

Earlier, Tsipras and his Syriza-led government’s fight to remain in the eurozone was put on the defensive amid mounting speculation of internal rupture.



Dismissing reports of a rift in the administration, the deputy premier, Giannis Dragasakis, denied that he had not been informed of a government paper laying the blame wholly with creditors for stalled negotiations. “The attempts to discover internal divisions in the Greek government is a waste of time,” he said in a statement released by his office. “These are fictional stories.”

Earlier, media reports had suggested that divisions between government cadres were such that neither he, nor Euclid Tsakalotos, the point-man in negotiations between Greece and its creditors, had any idea of the paper – released as both were about to hold talks with the ECB president, Mario Draghi, in Frankfurt. The statement, attributed to a senior government source, said disagreements and contradictions between the EU and IMF were at the root of Athens’ inability to reach an honourable compromise in talks.

Internal faultlines in the Syriza party have widened as the government has come under increased pressure to roll back its pre-election pledges and make concessions. Furious MPs, including the head of Syriza’s far-left faction, energy minister Panagiotis Lafazanis, have said it would be preferable to either hold a referendum or give up power if the anti-austerity administration is forced to cross its own “red lines”.

On Wednesday, the MEP and second world war hero Manolis Glezos – a legendary figure for many in Syriza – also waded in saying the leftist-led coalition should “not take a step back”.

“We have to be faithful to the will of the people and our [pre-electoral] proclamations without taking a step back,” he told Greek radio. “In my opinion it wouldn’t be bad to resort to the people’s will,” he said referring to the prospect of a referendum.

The Greek prime minister last week raised the spectre of a plebiscite being held in the event of the government being coerced into an agreement that “exceeded the limits” of its own anti-austerity mandate.