Cash-strapped Greece could avoid paying back the IMF on June 5th and win more time to negotiate a funding deal without defaulting if it lumps together all IMF repayments due in June and pays them at the end of the month, officials said on Tuesday.

Greece has to repay the International Monetary Fund €300 million on June 5th, the first of four instalments due in June that total €1.6 billions.

Cut off from markets, Athens has said it will not be able to make the June 5th payment without new loans from the euro zone, which insists it can only lend Greece more if the country agrees to reforms that would make its debt sustainable.

“There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment,” a senior euro zone official close to the talks with Athens said.

A second official close to the talks also acknowledged that possibility.

“That’s basically a technical treasury exercise and they could tell the IMF that this is how they want to do it and the IMF would probably have to be OK with that,” the first official said.

But the officials noted that Greece could only use such a trick if there was a credible prospect of a funding deal that could be communicated to markets and its citizens. Otherwise, the missed payment could trigger market panic and a bank run in Greece.

“So they would get a few extra weeks. But unless there is some perspective how they would deal with this full payment, it would be a risky thing for the Greeks to do. And the consequences would be unpredictable,” said the first official.

“People could want to withdraw their savings and who knows what Greece would have to do.”

Reuters