Greece floated Monday a proposal to roll over 4.5 billion euros ($6.1 billion) in debt next year fill a budget gap that has sparked concern Athens will need a new bailout, but a senior ECB official immediately ruled out such a move.
Speaking ahead of a meeting of eurozone finance ministers in Luxembourg, European Central Bank executive board member Joerg Asmussen said there was "no way" the gap could be covered by bond rollovers.
"There is a financial gap for the second half of 2014 of about 5-6 billion euros," Asmussen said.
"There is no way it can be covered by bond rollovers (which could contravene ECB law)," he said.
Instead, he urged Greek authorities to find alternative means to cover the shortfall, such as through the state's lumbering privatisation programme.
Speaking to business daily Naftemporiki, Finance Minister Yannis Stournaras had earlier said the operation would allow Greece to meet 4.4 billion euros ($5.4 billion) in 2014 loan repayments that EU-IMF creditors are worried the country cannot afford.
The impending financing hole, which could rise to 10.9 billion euros by 2015, is a big concern to the so called troika of creditors -- the European Union, European Central Bank and International Monetary Fund -- which are in the midst of deciding further loan releases to the cash-strapped Greek government.
But with state revenue still far short of planned spending, the Greek government is also looking for ways to afford day-to-day spending in 2014 without forcing more austerity on Greeks living through a sixth year of recession.
While the troika believes the budget shortfall is an alarming 4 billion euros, the Greek government estimates it at about half that -- some 2.2 billion euros -- which Stournaras said could be met by measures such as reducing red-tape.
For next year, the Greek government has forecast that it will reach a primary surplus, the balance of state spending that does not include debt payments.
Stournaras also said that he expected the ECB would extend maturities on Greek bonds in its possession, as part of an EU agreement last November that extends further assistance to Greece in return for progress on its fiscal belt-tightening.
Under the accord, options to reduce Greece's debt load include interest rate reduction, refinancing -- or rolling over -- maturing bonds or a combination of both.
"We have kept our promises thus far. (Our EU partners) must keep theirs too," Stournaras said.
Greece's latest draft budget for 2014 forecasts a slight dip in the debt from 321 billion euros to 319.4 billion euros, or 174.5 percent of annual output.
Greece was first bailed out for 110 billion euros in 2010 but when that failed, it got a second rescue in 2012 worth 130 billion euros plus a private sector debt write-off totalling more than 100 billion euros.
The second bailout is set to end in mid-2014, when the plan is for Greece to return to the markets for its long-term funding, an eventuality that for now seems unlikely.