Balotelli is on a season-long at the San Siro and is desperate to secure a permanent deal at AC Milan.
However CEO Adriano Galliani has said that Balotelli must prove himself first before being offered a new deal.
The Italian striker has scored once in 15 appearances this season.
“Mario is feeling well,” Galliani told reporters.
“He is desperate to stay here at Milan.
“But like I have said before, he does not merit a permanent deal at the moment.
“We really like Mario, but he has to convince us to earn a permanent deal.”
Meanwhile, Liverpool legend John Barnes has urged the club to do all that they can to secure the services of Bayern Munich’s Mario Gotze, even if the club are well stocked in midfield.
Gotze has been heavily linked to Liverpool in the summer and he could join former manager Jurgen Klopp.
Barnes told FootballFanCast:
“I think they are going to go for quality over quantity, regardless of whether they get Gotze or not. Of course Gotze is a very, very good player, even if he plays in a position that Liverpool don’t need to significantly strengthen.
“Liverpool are at the stage now that if any quality player becomes available, they should go for him. Even if they play in a position they don’t need, if they have the quality to improve the team it makes sense. Klopp knows the kind of players he wants.”