European Union approves Euro 7.16 bln emergency loan to Greece

WASHINGTON Greece has repaid its arrears to the worldwide Monetary Fund, worth about 2 billion euros ($2.17 billion), IMF communications director Gerry Rice said on Monday. However, restrictions on transactions and cash withdrawals remain in place, RFE/RL reports.

For an economy reeling from the recent uncertainty over the country’s euro future, the continuing controls on capital and the tax rises aren’t going down too well.

On July 17, Greek Prime Minister Alexis Tsipras reshuffled his cabinet and sacked 10 of members of his team, including Energy Minister Panagiotis Lafazanis, who had refused to back talks aimed at securing the new bailout deal.

Savers formed long queues in front of ATMs as doubts over the country’s place in the euro area spurred them to withdraw their cash from banks, The new data from the central bank shows that the total value of banknotes in circulation in Greece reached an all time high of €50.5 billion ($54.5 billion).

The European Central Bank increased emergency funding for Greek banks last week, ending a freeze of nearly three weeks and urging Europe to find a way to cut the country’s debt burden.

Despite widespread domestic opposition, the Greek government last week agreed to raise taxes, overhaul the pension system and carry out privatizations in order to receive a new bailout of 86 billion euros (USD 93.3 billion) over the next three years.

Control, including the ones on flight of capital however, remain.

On Monday, the first easing saw banks reopen their doors for limited services.

Since June-end, Greeks could withdraw only 60 euros a day.

However he faces difficulties with hardline factions in his leftwing Syriza party, which came to power in January pledging to reject bailout-driven austerity.