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World – Greece pays IMF outstanding debt

ATHENS –– The International Monetary Fund (IMF) has confirmed that Greece has cleared overdue debt repayments of €2.05 billion (about BDS$4.2 billion) and is no longer in arrears.

The repayments, and another for €4.2 billion to the European Central Bank (ECB) due today, came after the EU made Greece a short-term loan of €7 billion.

Cash-strapped Greece missed one repayment to the IMF in June and another earlier this month.

Earlier today, Greek banks reopened after being closed for three weeks.

However, many restrictions remain and Greeks are facing price rises with an increase in value added tax (VAT).

Banks have reopened but restrictions remain.

Banks have reopened but restrictions remain.

IMF spokesman Gerry Rice confirmed in a statement that Greece had repaid the totality of its arrears.

“As we have said, the Fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth,” he said.

Greece missed its first repayment to the IMF on June 30 and another on July 13 during deadlock over negotiations for a third bailout.

The crisis brought Greece to the brink of economic collapse and an exit from the euro.

The government has since reached a cash-for-reforms deal with its creditors and negotiations are due to begin on the proposed €86 billion rescue package. For the past three weeks, Greeks have been waiting in line at cash machines to withdraw a maximum of €60 (about BDS$120) a day, a restriction imposed amid fear of a run on the banks.

From today, the daily limit becomes a weekly one capped at €420 (about BDS$870), meaning Greeks will not have to queue every day.

However, a block on transfers to foreign banks and a ban on cashing cheques remain in place.

VAT is rising from 13 per cent to 23 per cent, meaning Greeks will pay more on a range of goods and services, including taxis and restaurants.

The rise was among a package of reforms demanded by Greece’s creditors.

Dimitris Chronis, an Athens kebab shop owner, said the new taxes were bad news for his business.

“I can’t put up my prices because I’ll have no customers at all,” he said.

“We used to deliver to offices nearby but most of them have closed. People would order a lot and buy food for their colleagues on special occasions. That era is over.”

Prime Minister Alexis Tsipras faced a rebellion from within his left-wing Syriza party over the tough austerity measures being demanded by other eurozone leaders, who are among Greece’s creditors.

But last week’s vote in the Greek Parliament paved the way for Greece to receive the €7 billion bridging loan that enabled the reopening of the banks.

Tsipras has since replaced his rebel ministers but analysts say his government has been weakened and fresh elections may be held in September or October.

The Greek parliament is due to hold a second vote on Wednesday on measures including justice and banking reforms. The government is again likely to scrape through, supported by opposition parties.

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.

The tough negotiations over Greece have also revealed divisions within the eurozone about the future of the bloc.

Germany, which is the largest contributor to Greek rescue funds, has taken a tough line on Greece, while other states, such as France, have appeared more conciliatory.

Today, France’s President Francois Hollande put forward his ideas for a new parliament for the eurozone countries and a shared budget.

The eurozone is currently managed by the Eurogroup, made up of the finance ministers of each nation.

Source: (BBC)

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