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| Greece pays off some debt as emergency loan arrives in Athens | Greece pays off some debt as emergency loan arrives in Athens |
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| The Greek money merry-go-round carries on in full swing after Athens received a €7.2bn (£5bn) loan from the EU and immediately spent almost all of it on repaying debts. | |
| Greek officials confirmed on Monday they had begun paying back international lenders, not long after the emergency bridging loan arrived in the Greek government’s bank account. | Greek officials confirmed on Monday they had begun paying back international lenders, not long after the emergency bridging loan arrived in the Greek government’s bank account. |
| The EU agreed the loan on Friday to enable Athens to meet urgent debt repayments and clear arrears, both necessary hurdles if the Greek government is to get a three-year bailout worth up to €86bn. | The EU agreed the loan on Friday to enable Athens to meet urgent debt repayments and clear arrears, both necessary hurdles if the Greek government is to get a three-year bailout worth up to €86bn. |
| The €7.2bn was transferred to Athens around noon (1000 BST) and was immediately used to repay Greece’s international creditors. The Greek government owes €4.2bn to the European Central Bank – a €3.5bn loan plus €0.7bn interest. Failure to make this payment could have forced Greece out of the eurozone, as the ECB would have had to pull its support for Greek banks because it cannot back an insolvent country. | |
| Greek officials said a €2.05bn payment to the International Monetary Fund was underway, representing two missed payments. Greece became the first developed economy to default on an IMF loan when it missed a payment nearly three weeks ago. But once Greece clears its arrears at the IMF, it will be entitled to more loans from the fund. | |
| The Greek government also owes €500,000 to the central bank of Greece and must clear this debt so it is not indebted to the “eurosystem” – the central banks of the eurozone. | |
| Greek government officials are hoping the economy will get back to normal after banks reopened on Monday for the first time in three weeks, although capital controls remain in place. | |
| Queues formed outside bank branches, with Greeks now able to withdraw up to €420 (£290) a week in one go, rather than being limited to €60 a day. But restrictions on sending money abroad and other controls have not been lifted. The Athens stock market is closed until further notice. | |
| “Capital controls and restrictions on withdrawals will remain in place, but we are entering a new stage which we all hope will be one of normality,” Louka Katseli, head of the Greek banking association, said. | “Capital controls and restrictions on withdrawals will remain in place, but we are entering a new stage which we all hope will be one of normality,” Louka Katseli, head of the Greek banking association, said. |
| The German chancellor, Angela Merkel, told German radio at the weekend that the remaining capital controls were “not normal life” and showed the need for speedy negotiations on a proposed €86bn bailout for Greece. | The German chancellor, Angela Merkel, told German radio at the weekend that the remaining capital controls were “not normal life” and showed the need for speedy negotiations on a proposed €86bn bailout for Greece. |
| The eurozone is pinning its hopes on reaching a deal with Athens by mid-August, which would allow Greece to pay €5bn of debt due that month using its new bailout fund rather than another emergency bridging loan. | The eurozone is pinning its hopes on reaching a deal with Athens by mid-August, which would allow Greece to pay €5bn of debt due that month using its new bailout fund rather than another emergency bridging loan. |
| Officials from Greece’s creditors known as the troika – the European commission, the ECB and the IMF – are expected to travel to Athens later this week to begin negotiations on a memorandum of understanding, the basic text of the bailout agreement. Their return to the Greek capital will underscore how Greece’s prime minister, Alexis Tsipras, has failed to significantly change the terms of the bailout deal. | |
| But the Greek government still has several hurdles to clear before talks can officially get underway. By Wednesday, the Greek parliament must pass a law to overhaul its civil justice system, with the aim of speeding up processes and reducing costs. The government must also transpose the EU’s bank recovery and resolution directive into law. This law was part of Europe’s response to the 2008 banking crisis and should have been put into national law months ago. | But the Greek government still has several hurdles to clear before talks can officially get underway. By Wednesday, the Greek parliament must pass a law to overhaul its civil justice system, with the aim of speeding up processes and reducing costs. The government must also transpose the EU’s bank recovery and resolution directive into law. This law was part of Europe’s response to the 2008 banking crisis and should have been put into national law months ago. |