Greek finance minister Yanis Varoufakis has told MPs that the country will not accept a primary budget surplus target of more than one per cent.
Read more: S&P lowers Greece's credit rating further
The country had originally proposed a target of 0.6 per cent for 2015 – significantly below the 1.5 per cent mooted by its lenders. It then raised that to 0.75 per cent, while its creditors lowered their target to one per cent.
However, at a session in parliament today, he said Greek negotiators "have not, under any circumstances, agreed to one per cent for this year as it was reported".
"This kind of approach is part of the problem and not the solution and we are not going to sign this."
The news came as Alexis Tsipras, the country's prime minister, prepared to meet with European president Jean-Claude Juncker this afternoon. Talks are likely to focus on pension reforms, VAT and the negotiations' major sticking point – primary budget surplus targets.
Last night Standard & Poor's lowered Greece's credit rating to CCC, and warned it could be downgraded even further.
"As its liquidity position continues to deteriorate, Greece appears to be prioritising other spending items over debt servicing. In our view, without a turnaround in the trajectory of nominal GDP and deep public sector reform, Greece's debt is unsustainable," it said.