Greece cleared its first hurdle in the bailout crisis by repaying the money due to the International Monetary Fund and the European Central Bank with the European Commission’s EUR 7.16 billion bridge-loan, and banks in the crisis struck country opened partially despite stock exchange closure.
In addition, the Greek government also paid money owed to the Greece’s central bank. In total, the government repaid EUR 6.8 billion to its creditors.
In an official release, Gerry Rice, Director of Communications at the International Monetary Fund, confirmed that Greece repaid the totality of its arrears worth about EUR 2.0 billion to the IMF.
“Greece is therefore no longer in arrears to the IMF. As we have said, the Fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth,” said Rice.
Additionally, the ECB confirmed the repayment in its twitter page by tweeting, “ECB confirms it has been repaid. #Greece”
The country repaid the debt due with the 7.16 billion euro bridge-loan approved on Thursday under the European Financial Stabilization Mechanism, with a maximum maturity of three months.
Meanwhile, banks in Greece reopened partially on Monday after a three-week closure, helped by ECB lifting the emergency lending assistance by 900 million euros for a week.
The Greeks can now withdraw up to 420 euros a week as opposed to the previous withdrawal limit of 60 euros per day. Yet, capital controls largely remain in place, including a block on foreign banks money transfers and a ban on new accounts opening.
Nevertheless, Greek stock and bond markets are reportedly to remain closed through Wednesday, when the parliament would vote again towards the final negotiations for the third bailout deal.
Last week, Greek Prime Minister Alexis Tsipras reshuffled the cabinet by replacing the ministers who voted against the stringent bailout terms. He is seeking negotiations with the eurozone members on a third bailout of 86 billion euros, buoyed by last Thursday’s vote in which Greek lawmakers approved stringent austerity measures.
However, Capital Economics Managing Director Roger Bootle believes that the recent agreement to provide the crisis struck Greece with a third bailout would unlikely end the crisis or prevent a Grexit. He still expects a Grexit in the next twelve months.
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