Athens set to repay European Central Bank and International Monetary Fund loans

Greece has made an overdue payment of €2 billion to the worldwide Monetary Fund (IMF), allowing itself to come out of arrears.

For the past three weeks, Greeks have been waiting in line at cash machines to withdraw a maximum of €60 (£41) a day, a restriction imposed amid fear of a run on the banks.

Last week the government of Prime Minister Alexis Tsipras presented a request for a third financial bailout in which it accepted a large portion of the additional austerity measures demanded by the creditors as a condition for receiving new funds.

Greece has relied on bailout loans totaling 240 billion euros since 2010 after it was locked out of worldwide money markets.

Without it, the bank could have been forced to end emergency liquidity assistance to Greek banks if the government defaulted on its bond payment.

Representatives from Greece’s creditors – known as the Troika – are due to arrive in the country soon and talks on the new bailout are expected to last about a month. Greeks can therefore withdraw up to 420 euros ($455) a week.

“Capital controls will remain in place at least until the banks have been recapitalized”, said Mr Wall. The controls were introduced because negotiations with creditors had reached an impasse, fueling fears of a Greek exit from the euro and a bank run.

With the ECB limit on ELA, nobody, not even ordinary depositors, wanted to be exposed to Greek banks. Greek banks reopened on Monday after being closed for three weeks.

Paying off the IMF and European Central Bank will give Greece some breathing space but the country will need bailout funds to meet upcoming debts.

“The government was obliged to make a tactical retreat to save the country”, new Labor Minister Giorgos Katrougalos said Monday.