Greece will likely run out of money in June and negotiations on reform have to be completed by that time, the IMF's European head has said.

Paul Thomsen, Director of the International Monetary Fund (IMF)'s European Department, warned in an interview with German daily Handelsblatt [DE] that an agreement must take place by end of June to avoid a situation in which Greece could slide into bankruptcy.

Thomsen added that he believed Greece would remain within the Eurozone, but made clear members of the EU's single currency area should prepare to take measures in case of a "Grexit" scenario. In his words if Athens quits the Eurozone, a strong signal should be sent to those countries which are waiting to get into the area to dispel any doubt that the "Grexit" will put a wheel on their integration.

He explained that, even though negotiations between Greece and lenders had recently gathered pace, the parties were "far" from achieving their goal.

Earlier, Greek Finance Minister Yanis Varoufakis warned that an event of Grexit could spread to other countries as well.

"Once the idea enters peoples' minds that monetary union is not forever, speculation begins ... who's next? That question is the solvent of any monetary union. Sooner or later it's going to start raising interest rates, political tensions, capital flight," the English-language version of daily Kathimerini quotes him as saying in an interview with Spanish TV La Sexta.