Greece has denied reports of a rift with EU-IMF auditors who cut short a visit to the debt-hit euro zone state after noting that the country had failed to meet rescue funding conditions.
"There is nothing of the sort," a finance ministry source told the AFP news agency, insisting that a scheduled instalment from a €110 billion EU-IMF bail-out loan secured last year "is not at risk".
Meanwhile, the European Union has agreed to provide Ireland and Portugal with the next installments of their multi-billion-euro bail-outs after progress in their austerity measures.
The decision will pave the way for Ireland to receive over the next two months a total of €7.5 billion drawn from the €85-billion rescue package.
Portugal will receive €11.5 billion, part of its €78-billion EU-IMF bail-out.
The EU said the decision to release the funds followed the "positive outcome" of the last quarterly reviews by the European Commission, the European Central Bank and the IMF, which examined the progress made in implementing austerity measures.
"During their visits to Dublin in the first half of July and to Lisbon at the beginning of August, the three institutions noted that the Irish and Portuguese programmes were on track," the EU said in a statement.
Dublin and Lisbon were "meeting important programme milestones and demonstrating their commitment to addressing underlying weaknesses in public finances and the financial sector and as regards competitiveness."
Today Greek finance minister Evangelos Venizelos said that Greece's public deficit target for this year would be automatically revised upwards given a worse-than-expected recession.
The minister told a news conference that the target, a key condition for continued funding from the €110-billion ($158-billion) EU-IMF bail-out loan agreed last year, would be automatically revised given the magnitude of the country's economic contraction.
Greek media have been speculating the target would be raised to 8.8% from 7.4%.
Greek media including the semi-state Athens News Agency reported a deadlock in talks with European Union, International Monetary Fund and European Central Bank representatives who were said to have demanded additional measures worth €1.7 billion to make up a shortfall.
"There is a good climate of cooperation," the ministry source said. "They are pushing for faster changes, and they are right."
The source told AFP the auditing team would return to Greece in 10 days, when the 2012 budget draft was ready, to close the negotiations.
The senior officials from the three organisations arrived on Monday to head the audit, which usually takes around two weeks.
The EU-IMF mission in Athens said today that "good progress" had been made on a fresh revamp of Greece's finances, but that more time is needed to draft a new 2012 budget.
"The mission has made good progress, but has temporarily left Athens to allow the authorities to complete technical work, among other things, related to the 2012 budget and growth-enhancing structural reforms," the European Union and International Monetary Fund said in a joint statement.
The talk of a rift between Greece and its creditors follows a furore over a report by a Greek budgetary watchdog which warned that the country's massive debt was "out of control", as it was falling further into recession.
Yesterday, the head of the newly-formed State Budget Execution Monitoring Office submitted her resignation to parliament after strong criticism from Venizelos, who accused the agency of irresponsibility for releasing the report.
Venizelos had complained the watchdog lacked "knowledge, experience and responsibility" about how macroeconomic and fiscal reports are compiled, checked and published.
Hit by stinging austerity measures, the Greek economy is shrinking at an alarming rate, with Venizelos last week admitting it was likely to contract by more than 4.5% in 2011, worse than the previous 3.5% forecast.
The slowing economy has as complicated the government's efforts to squeeze down the public deficit.
At the end of July the deficit had hit €15.5 billion, compared with the annual target of €16.68 billion, or 7.4% of GDP.
The government now reportedly concedes that because of the greater-than-foreseen recession, the deficit could exceed 8.5% in 2011.
