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S&P on Greece: ‘It’s a race against the clock’

Just a day after a credit rating downgrade by Standard & Poor's (S&P), a leading figure at the agency has detailed his concerns about the lack of progress in negotiations between Greece and its international creditors.

"(There's) very little progress, and this is all the more worrisome because Greece is running out of time. We cannot quite be sure how much liquidity there is left," Moritz Kraemer, the chief sovereign rating officer at S&P told CNBC Thursday in Washington D.C.

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"We are definitely talking about a matter of weeks and not months and the government is starting to scrape the barrel of, sort of, liquidity from state companies, pension funds et cetera. So it's a race against the clock."

On Wednesday, the rating agency cut Greece's credit rating to "CCC+" from "B-" with a negative outlook. It said Greece's debt was "unsustainable" without "deep economic reform or further relief."

Protesters take part in an anti-austerity pro-government demonstration in Athens at the height of the Greek crisis.
Yannis Behrakis | Reuters
Protesters take part in an anti-austerity pro-government demonstration in Athens at the height of the Greek crisis.

S&P said its outlook on Greece was "negative," because of the potential for a further worsening liquidity in the Greek government, banks and economy. The outlook for full-year economic growth looked "highly uncertain," the agency said.

Greek bond yields were under pressure again on Thursday, with yields soaring on short- and medium-term paper. The 10-year yield on Greek debt reached as high as 12.8 percent.

Further international aid for Greece is conditional on its socialist, anti-austerity government agreeing to instigate structural reforms. However, discussions in recent weeks between Greece and the bodies overseeing its bailout program—the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF)—have yielded no agreement on reforms.

The country's creditors agreed to extend its bailout program by four months in February in order to give Greece's then-new government more time to enact reforms. Lack of progress on these reforms means Greece's last tranche of aid—needed in order to make loan repayments to the IMF and ECB in the coming weeks and months—has not been released.

IMF members 'expect' repayment

Christine Lagarde, the head of the IMF, told reporters on Thursday that the organization would not grant a payment delay.

Subsequently, David Lipton, deputy managing director of the IMF, told CNBC on Thursday that he expected Greece to pay up.

"Our institution is a pool of money provided by our members. Our members expect borrowers to repay," Lipton said from the IMF's headquarters in Washington.

"We would like to get on to continue with the business of discussing what policies can be adopted to solve Greece's problems."

Lipton said Athens must come up with more "concrete" proposals to allow the IMF to work with Greece.

He added that the government must consider how to get its economy growing again and said that structural reforms and increased infrastructure spending could help not just Greece but all euro zone nations.

"They (the Greek government) can approach it in different ways from their predecessor governments, but the irreducible challenge is to try to solve the problems that the Greek economy faces," he said.

—CNBC's Holly Ellyatt and Jacob Pramuk contributed to this report.