Greece says vital loan payment not affected by debt talks impasse

The deadlock in eurozone-IMF talks over Greek debt relief will not affect a vital loan payment needed to avert a July default, Athens said Tuesday.

"The outcome of the talks is not connected to the loan disbursement, the issue was settled (last night)," government spokesman Dimitris Tzanakopoulos said hours after late-night talks in Brussels were called off.

Another attempt at a deal on Greece's soaring debt will be made at the next scheduled meeting on June 15.

The eurozone-IMF standoff has held up a tranche of bailout funds that will let Greece repay 7.0 billion euros of loans due in July.

The IMF is demanding that the eurozone provide a detailed commitment to debt relief that Greece will adopt at the end of its current bailout programme, expected at the end of 2018.

But Germany is wary because doing any favours for Athens is deemed a vote killer ahead of general elections in September.

"The German finance ministry does not want to specify mid-term debt (relief) measures to the extent required by the IMF," Tzanakopoulos said.

Hopes had been high that the deadlock could be broken after Greek lawmakers last Thursday adopted a new round of austerity measures including pension and tax break cuts.

Greece's debt stands at nearly 180 percent of annual output, the legacy of a crisis that brought panic to the markets and nearly forced the country out of the eurozone.

Tzanakopoulos said Athens and "several" of its eurozone partners turned down a proposed deal late Monday that was deemed "incompatible" with its targets.

"It is preferable to prepare a better solution than to take decisions that perpetuate the problem and do not offer a clear way out," Tzanakopoulos said.