Greece clears arrears

THE International Monetary Fund (IMF) confirmed Greece had cleared overdue debt repayments of £1.4billion ($F4.66b) and is no longer in arrears.

The repayments, and another for £4.2b ($F9.73b) to the European Central Bank (ECB) due on Monday, came after the EU made Greece a short-term loan of £7b ($F16.21b).

Cash-strapped Greece missed one repayment to the IMF in June and another earlier this month. Earlier on Monday, 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).

Just because the doors of Greek banks are open today, don’t be fooled into thinking they and the Greek economy are anywhere near back to recovery.

There are still major restrictions on the ability of their customers to obtain their cash or move it around.

The symbolic importance of the European Central Bank turning on the emergency lending tap again was important, but it has only been turned on a fraction.

There is no possibility of them thriving for months and even possibly years.

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 30 June and another on 13 July during deadlock over negotiations for a third bailout.

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

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.