Debt crisis Greece pays IMF arrears

Greece repaid the roughly 2 billion euros ($2.2 billion) it owed to the International Monetary (IMF) on Monday

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The International Monetary Fund (IMF) has confirmed that Greece has cleared overdue debt repayments of €2.05bn (£1.4bn) and is no longer in arrears.

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

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).

"I can confirm that Greece today repaid the totality of its arrears to the IMF, equivalent to SDR 1.6 billion (about EUR 2.0 billion). Greece is therefore no longer in arrears to the IMF," said Gerry Rice, director of communications at the IMF in a statement on Monday.

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

The confirmation came after Reuters cited finance ministry officials saying that Greece had begun to repay the total of 6.25 billion euros ($6.8 billion) it owed to both the European Central Bank (ECB) and the IMF.

The ECB confirmed that it, too, had been repaid.

However, experts are worried that the next round of bailout talks is skating over one vital subject: Debt relief. 

According to Reuters, Athens on Monday began paying back 4.2 billion euros in principal and interest to the ECB and 2.05 billion euros in arrears it has owed the IMF since it stopped repaying its debts at the end of June.

It is also repaying a 500 million euro loan to the Greek central bank. 

The country is paying its bills using a 7.16 billion euro bridging loan secured last week after it agreed to a series of harsh reforms. The measures, which have to be put into law, should result in the country receiving its third bailout.

Talks over the details of a third, 86-billion-euro ($93 billion) bailout for Greece are due to start in earnest on Monday after euro zone parliaments gave them the green light last week. 

Greek banks upped their use of European Central Bank emergency funding in June, tapping 86.77 billion euros, up from 77.57 billion euros in May, Reuters reported on Monday.

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