ATHENS - An envoy from the International Monetary Fund says European countries must decide how to plug potential funding gaps for Greece next year before the IMF can release the next batch of loans.

Senior representative Bob Traa said Tuesday that EU leaders had "hard nuts to crack" at an EU summit in late June - agreeing on additional rescue support if needed - before the IMF would release its part of a euro12 billion July installment of last year's euro110 billion bailout package.

The initial rescue loan agreement had predicted Greece would be able to return to borrowing on international markets for part of its funding needs next year, but high interest rates mean that is highly unlikely.