The deadlock between Greece and its creditors over reforms went from bad to worse on Thursday as one of its lenders -- the International Monetary Fund (IMF) -- quit talks, throwing the negotiations into crisis.
Senior European Union officials have formally discussed for the first time a possible Greek debt default, Reuters reported on Friday, citing anonymous sources. They also told Reuters that a deal being struck by the end of June was now seen as the least likely of possible scenarios.
Talks between Greece and the bodies overseeing its bailout program have hit multiple obstacles over the course of the last four months. However, the situation worsened when the IMF announced that its delegation had left negotiations in Brussels because of "major differences" with Athens over how to save the country from bankruptcy.
Jakob Christensen, senior economist at Exotix, told CNBC that the move sent a "clear message" to Greece that it needed to compromise – and fast.
"(The move) clearly sends a signal to the Greek government that the stakes are very high and there is very little room for more concessions from the IMF side," he told CNBC Europe's "Squawk Box" on Friday.
"They (the IMF) have moved quite a lot since the start of discussions, both on the fiscal targets and labor market reforms, and now they're not prepared to go further."
Despite this, Greece's state minister, Alekos Flabouraris, remained optimistic that a deal would be reached next week, when the Eurogroup of euro zone finance ministers is due to meet.
"I hope it (a deal) will come very soon, on June 18, when the Eurogroup takes place," Reuters quotes Flabouraris as saying on state television ERT Friday.
In addition, a Greek official said that the government was "closer than ever to a deal."
Greek Prime Minister Alexis Tspiras spoke with Jean-Claude Juncker, the president of the European Commission, on Friday regarding the next steps of the negotiations.
However, investors were unconvinced by the direction of the talks, with the benchmark Athens composite index closing nearly 6 percent lower on Friday.