Greece Repays €2 Billion to International Monetary Fund

WASHINGTON Greece has repaid its arrears to the global Monetary Fund, worth about 2 billion euros ($2.17 billion), IMF communications director Gerry Rice said on Monday.

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.

Their reopening followed Prime Minister Alexis Tsipras’ reluctant acceptance of a tough package of bailout demands from European partners, but a revolt in the ruling Syriza party now threatens the stability of his government and officials say new elections may be held as early as September or October. So unless Europe finalizes the terms of the third €86 billion EFSF bailout in the next 4 weeks, Greece will need another bridge loan just to repay the European Central Bank.

A default would have put further assistance from the ECB in jeopardy – and it is financial aid from the ECB that is now keeping the Greek banks functioning. Following months of growing distrust, Greece’s partners in the 19-country eurozone wanted to see measures enacted before bailout talks could begin.

Emergency funding, which is more costly than borrowing from the European Central Bank, rose to 86.77 billion euros ($94.12 billion) last month from 77.57 billion in May, the data showed.

With the ECB limit on ELA, nobody, not even ordinary depositors, wanted to be exposed to Greek banks.

“Capital controls will remain in place at least until the banks have been recapitalized”, said Mr Wall. There were no reports of any problems.

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

For the average Greek, opening of banks doesn’t bring a host of good news, as the withdrawal limits remain the same, but the relaxation has been made on another account.