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Greek debt crisis: Greece begins repaying ECB and IMF as banks reopen - live Greek debt crisis: Greece begins repaying ECB and IMF as banks reopen - live
(35 minutes later)
1.30pm BST13:30
Summary: Greece takes a step towards normality
A quick recap.
Bank branches across Greece have reopened today, as the financial restrictions that have constrained the country for the last three weeks are relaxed, a little, following last week’s bailout deal.
Queues formed early at branches in Athens and Thessaloniki, but there were no reports of panic.
That’s partly because the banking sector is still subject to capital controls, which mean people can’t withdraw more than €420 per week from their accounts, or transfer money overseas. Here’s a list of the restrictions.
Greek shareholders aren’t allowed to buy or sell stock today, as the Athens exchange remains closed. It may open later this week.
The European Commission is sending a $7.2bn bridge loan to Greece today; the money is being used to repay a maturing debt repayment owed to the ECB, and to cover outstanding bills to the IMF.
Last week’s austerity measures are already hitting Greeks, who are now paying higher VAT rates on many basic goods.
European stock markets have risen this morning, with the main indices up around 1% in a fairly quiet trading session. Greek fears have receded, for the moment at least.
12.24pm BST12:2412.24pm BST12:24
Greece’s finance minister, Euclid Tsakalotos, has said farewell to one deputy this lunchtime, and welcomed another.Greece’s finance minister, Euclid Tsakalotos, has said farewell to one deputy this lunchtime, and welcomed another.
Nadia Valavani (the outgoing deputy fin. min.) resigned last week in protest at Greece’s new bailout programme, and is being replaced by Tryfon Alexiadis:Nadia Valavani (the outgoing deputy fin. min.) resigned last week in protest at Greece’s new bailout programme, and is being replaced by Tryfon Alexiadis:
Alexiadis had better hit the ground running, as the Greek government must pass a second set of austerity measures later this week (probably on Wednesday night).Alexiadis had better hit the ground running, as the Greek government must pass a second set of austerity measures later this week (probably on Wednesday night).
Updated at 12.40pm BSTUpdated at 12.40pm BST
12.02pm BST12:0212.02pm BST12:02
Here’s a technical explanation of how Greece’s new bridge loan will work (thanks to Katy Lee of AFP)Here’s a technical explanation of how Greece’s new bridge loan will work (thanks to Katy Lee of AFP)
European Commission confirms $7.16 bn loan paid to Greece so they can now pay ECB & IMF (see gif for explanation) pic.twitter.com/3xxPq6pU1FEuropean Commission confirms $7.16 bn loan paid to Greece so they can now pay ECB & IMF (see gif for explanation) pic.twitter.com/3xxPq6pU1F
Updated at 12.05pm BSTUpdated at 12.05pm BST
11.44am BST11:4411.44am BST11:44
The EC’s chief spokesman, Margaritis Schinas, is fielding a few questions on Greece:The EC’s chief spokesman, Margaritis Schinas, is fielding a few questions on Greece:
Asked about troika v institutions, commission spokesman says he wouldn't like "to become lost in terminology". #GreeceAsked about troika v institutions, commission spokesman says he wouldn't like "to become lost in terminology". #Greece
@Elbarbie Just referendums, I guess@Elbarbie Just referendums, I guess
11.33am BST11:3311.33am BST11:33
Greece gets bridge loan, and immediately spends itGreece gets bridge loan, and immediately spends it
Greece won’t have much time to enjoy the €7bn bridge loan organised by the European Union last week.Greece won’t have much time to enjoy the €7bn bridge loan organised by the European Union last week.
EU officials have just announced that this financing has been sent to Athens today, following several days of work by Brussels officials.EU officials have just announced that this financing has been sent to Athens today, following several days of work by Brussels officials.
The €7.16bn bridge loan just sent to #Greece, says @Mina_AndreevaThe €7.16bn bridge loan just sent to #Greece, says @Mina_Andreeva
But over in the Greek capital, the money is already being spent to address Greece’s latest debt demands.But over in the Greek capital, the money is already being spent to address Greece’s latest debt demands.
Government officials have confirmed that the process of repaying $4.2bn to the European Central Bank today has begun. That means Greece will avoid defaulting on its obligations to the ECB, which would have had very serious consequences.Government officials have confirmed that the process of repaying $4.2bn to the European Central Bank today has begun. That means Greece will avoid defaulting on its obligations to the ECB, which would have had very serious consequences.
Greece also plans to clear its arrears to the International Monetary Fund, by sending €2.05bn over to Washington. That will cover the €1.6bn repayments due in June, which was missed as Greece staggered out of its previous bailout, plus a second payment due last week.Greece also plans to clear its arrears to the International Monetary Fund, by sending €2.05bn over to Washington. That will cover the €1.6bn repayments due in June, which was missed as Greece staggered out of its previous bailout, plus a second payment due last week.
So in short, Greece’s creditors have loaned it more money, so it can repay its creditors.So in short, Greece’s creditors have loaned it more money, so it can repay its creditors.
The cash spends hardly any time in Athens at all, before being yanked back out again. Maybe it should be renamed a bungee loan.....The cash spends hardly any time in Athens at all, before being yanked back out again. Maybe it should be renamed a bungee loan.....
Commission confirms #Greece has received €7.2 bn bridge loan. Now money can go straight out the door to repay @ecb and other creditors.Commission confirms #Greece has received €7.2 bn bridge loan. Now money can go straight out the door to repay @ecb and other creditors.
11.06am BST11:0611.06am BST11:06
But while shares rally, the price of gold has hit its lowest level since early 2010:But while shares rally, the price of gold has hit its lowest level since early 2010:
Related: Gold falls to five-year low as fears ease over GreeceRelated: Gold falls to five-year low as fears ease over Greece
11.04am BST11:0411.04am BST11:04
Europe’s stock markets are all up this morning, as worries over Greece recede.Europe’s stock markets are all up this morning, as worries over Greece recede.
The Italian FTSE MIB is leading the way, up 1.5%, followed by Spain, France and Germany:The Italian FTSE MIB is leading the way, up 1.5%, followed by Spain, France and Germany:
City experts appreciate that the Greek crisis isn’t over.City experts appreciate that the Greek crisis isn’t over.
Connor Campbell, financial analyst at SpreadEx, explains:Connor Campbell, financial analyst at SpreadEx, explains:
After a weekend (mercifully) free of big Eurozone drama, the semblance of normality returned this morning as the Greek banks opened for the first time in 3 weeks.After a weekend (mercifully) free of big Eurozone drama, the semblance of normality returned this morning as the Greek banks opened for the first time in 3 weeks.
But there is a reason why these re-openings merely provide a surface level simulation of a working economy, not the real thing; capital controls remain in place, with the Greek public allowed only €420 a week (a marginal adjustment of the previous €60 a day) alongside a host of other restrictions.But there is a reason why these re-openings merely provide a surface level simulation of a working economy, not the real thing; capital controls remain in place, with the Greek public allowed only €420 a week (a marginal adjustment of the previous €60 a day) alongside a host of other restrictions.
But rather than watching Athens and Brussels again, many traders are concentrating on events up at St Andrews:But rather than watching Athens and Brussels again, many traders are concentrating on events up at St Andrews:
I blame #British weather for light newsflow, #TheOpen continues on Mon for first time since 1988, traders watching instead of trading #GolfI blame #British weather for light newsflow, #TheOpen continues on Mon for first time since 1988, traders watching instead of trading #Golf
10.44am BST10:4410.44am BST10:44
Greece’s factories was struggling even before capital controls were imposed at the end of June, new data shows.Greece’s factories was struggling even before capital controls were imposed at the end of June, new data shows.
Turnover across the industrial sector shrank by 4.2% year-on year in May, according to stats body Elstat.Turnover across the industrial sector shrank by 4.2% year-on year in May, according to stats body Elstat.
That follows a 4% annual decline in April, and a very serious slide at the start of the year:That follows a 4% annual decline in April, and a very serious slide at the start of the year:
Elstat reports that mining and quarrying turnover slumped by 8.3%, while manufacturing turnover dropped by 4.2%.Elstat reports that mining and quarrying turnover slumped by 8.3%, while manufacturing turnover dropped by 4.2%.
9.57am BST09:579.57am BST09:57
Krugman: I may have overestimated the competence of the Greek government.....Krugman: I may have overestimated the competence of the Greek government.....
Quote of the Day goes to Paul Krugman, the Nobel Prize-winning economist.Quote of the Day goes to Paul Krugman, the Nobel Prize-winning economist.
He’s admitted to CNN’s Fareed Zakaria that he didn’t anticipate that Alexis Tsipras wouldn’t have a Plan B, in case Greece’s creditors didn’t fold.He’s admitted to CNN’s Fareed Zakaria that he didn’t anticipate that Alexis Tsipras wouldn’t have a Plan B, in case Greece’s creditors didn’t fold.
Krugman on assuming that Greece had an exit plan from the Euro:Krugman on assuming that Greece had an exit plan from the Euro:
“…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”“…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”
Krugman also believes that Greece will eventually leave the eurozone, unless it is granted “enormous” debt relief.Krugman also believes that Greece will eventually leave the eurozone, unless it is granted “enormous” debt relief.
Paul Krugman on CNN: "I may have overestimated the competence of the Greek government" http://t.co/fwE2YZHpLUPaul Krugman on CNN: "I may have overestimated the competence of the Greek government" http://t.co/fwE2YZHpLU
9.33am BST09:339.33am BST09:33
The re-opening of Greece’s banks appears to be operating smoothly, judging by this photo from a National Bank branch in Athens:The re-opening of Greece’s banks appears to be operating smoothly, judging by this photo from a National Bank branch in Athens:
9.17am BST09:179.17am BST09:17
Today’s Greek VAT rise is the third since the country’s austerity programme began, five years ago:Today’s Greek VAT rise is the third since the country’s austerity programme began, five years ago:
VAT on basic foodstuffs 2005: 8% 2006: 9% 2010: 11% 2011: 13% 2015: 23% Sharing the burden fairly & proportionately. https://t.co/zqlGhVSuGhVAT on basic foodstuffs 2005: 8% 2006: 9% 2010: 11% 2011: 13% 2015: 23% Sharing the burden fairly & proportionately. https://t.co/zqlGhVSuGh
9.08am BST09:089.08am BST09:08
Greece's VAT rise hits customersGreece's VAT rise hits customers
Greek consumers are facing higher prices today, as the sales tax hike demanded by its creditors is applied.Greek consumers are facing higher prices today, as the sales tax hike demanded by its creditors is applied.
Sweeping VAT changes mean some food stuffs, restaurant meals and education services cost more. And even death (life’s other certainty alongside those taxes) will be more expensive:Sweeping VAT changes mean some food stuffs, restaurant meals and education services cost more. And even death (life’s other certainty alongside those taxes) will be more expensive:
Associated Press has the details:Associated Press has the details:
The VAT rose from 13% to 23%, making some meats, cooking oils other than olive oil, cocoa, vinegar, salt, flowers, firewood, fertilizer, insecticides, sanitary towels and other basics all more expensive.The VAT rose from 13% to 23%, making some meats, cooking oils other than olive oil, cocoa, vinegar, salt, flowers, firewood, fertilizer, insecticides, sanitary towels and other basics all more expensive.
Services hit by the new VAT increases include restaurants and cafes, funeral parlors, taxis, cramming and tutorial schools very popular with Greek students seeking to make up for the deficiencies of the school system language institutes and computer learning centers. Public transport fares are expected to rise early next month.Services hit by the new VAT increases include restaurants and cafes, funeral parlors, taxis, cramming and tutorial schools very popular with Greek students seeking to make up for the deficiencies of the school system language institutes and computer learning centers. Public transport fares are expected to rise early next month.
8.47am BST08:478.47am BST08:47
Greece 'gives order to repay ECB and IMF'Greece 'gives order to repay ECB and IMF'
Bloomberg is reporting that Greece has spent almost all of the €7bn bridge loan hammered out by the eurozone on Friday.Bloomberg is reporting that Greece has spent almost all of the €7bn bridge loan hammered out by the eurozone on Friday.
*GREECE SAID TO GIVE PAYMENT ORDER FOR EU 6.8BN TO CREDITORS, COVERS ECB, IMF, CENTRAL BANKS: FIN MIN OFFICIAL (Bloomberg)*GREECE SAID TO GIVE PAYMENT ORDER FOR EU 6.8BN TO CREDITORS, COVERS ECB, IMF, CENTRAL BANKS: FIN MIN OFFICIAL (Bloomberg)
If so, Greece would have met today’s repayment to the European Central Bank, and covered its arrears to the International Monetary Fund (having missed two payments in recent weeks)If so, Greece would have met today’s repayment to the European Central Bank, and covered its arrears to the International Monetary Fund (having missed two payments in recent weeks)
A bridge financing that'd be quickly spent. *GREECE SAID TO GIVE ORDER FOR EU6.8 BLN PAYMENTS TO CREDITORS; ECB, IMF, CEN BANKA bridge financing that'd be quickly spent. *GREECE SAID TO GIVE ORDER FOR EU6.8 BLN PAYMENTS TO CREDITORS; ECB, IMF, CEN BANK
More to follow....More to follow....
8.45am BST08:458.45am BST08:45
Customers at this National Bank branch in Athens received little numbered tickets to allocate places in the queue:Customers at this National Bank branch in Athens received little numbered tickets to allocate places in the queue:
But heated conversations with the branch manager were on a strictly ‘first-come, first-served’ basis.....But heated conversations with the branch manager were on a strictly ‘first-come, first-served’ basis.....
Updated at 9.07am BSTUpdated at 9.07am BST
8.37am BST08:378.37am BST08:37
Across central Athens, customers waited patiently at this Alpha Bank branch:Across central Athens, customers waited patiently at this Alpha Bank branch:
8.31am BST08:318.31am BST08:31
Although Greece’s banks are reopening, customers will find that many services are still off limits.Although Greece’s banks are reopening, customers will find that many services are still off limits.
Macropolis, the news and analysis site, has compiled a list of the current restrictions, on top of the €420/week limit on cash withdrawals.Macropolis, the news and analysis site, has compiled a list of the current restrictions, on top of the €420/week limit on cash withdrawals.
Here’s some highlights:Here’s some highlights:
Greek banks open again after 3 weeks but there's really not that much you can do inside them https://t.co/cKemBkhvXE #Greece #euroGreek banks open again after 3 weeks but there's really not that much you can do inside them https://t.co/cKemBkhvXE #Greece #euro
8.16am BST08:168.16am BST08:16
After months of drama, the financial markets are now more relaxed about Greece, according to David Cumming, head of UK equities at Standard Life Investments.After months of drama, the financial markets are now more relaxed about Greece, according to David Cumming, head of UK equities at Standard Life Investments.
He told Radio 4’s Today Programme that:He told Radio 4’s Today Programme that:
“The key question is: is the euro going to break up because of the Greek crisis, and the answer is no it isn’t. The second issue is when are we going to stop talking about it because it’s corrosive at the margin for business confidence in Europe. The answer is relatively soon.“The key question is: is the euro going to break up because of the Greek crisis, and the answer is no it isn’t. The second issue is when are we going to stop talking about it because it’s corrosive at the margin for business confidence in Europe. The answer is relatively soon.
From a market perspective it [Greece] has become less of an issue”.From a market perspective it [Greece] has become less of an issue”.
(via the BBC)(via the BBC)
8.09am BST08:098.09am BST08:09
Queues also formed outside National Bank branches in Athens, but it all looks calm:Queues also formed outside National Bank branches in Athens, but it all looks calm:
8.01am BST08:018.01am BST08:01
Customers queued outside this National Bank branch in Thessaloniki, Greece’s second city, this morning, as it reopened for the first time since late June:Customers queued outside this National Bank branch in Thessaloniki, Greece’s second city, this morning, as it reopened for the first time since late June:
Updated at 8.11am BSTUpdated at 8.11am BST
7.56am BST07:567.56am BST07:56
The head of Greece’s banking association, Louka Katseli, hopes that Greeks will put money back into their accounts:The head of Greece’s banking association, Louka Katseli, hopes that Greeks will put money back into their accounts:
She told Skai television yesterday:She told Skai television yesterday:
“Tomorrow when the banks reopen and normality is restored, let’s all help our economy.“Tomorrow when the banks reopen and normality is restored, let’s all help our economy.
If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy,”If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy,”
(quote via Reuters).(quote via Reuters).
7.51am BST07:517.51am BST07:51
Adea Guillot, journalist with Le Monde, is tweeting from a bank branch in Athens:Adea Guillot, journalist with Le Monde, is tweeting from a bank branch in Athens:
pic.twitter.com/szlbUgL2tUpic.twitter.com/szlbUgL2tU
Yiannis,agent de securite ds une banque d'Athenes: tout se passe tres bien. Les gens sont calmes et philosophes. pic.twitter.com/UtRlFxqy15Yiannis,agent de securite ds une banque d'Athenes: tout se passe tres bien. Les gens sont calmes et philosophes. pic.twitter.com/UtRlFxqy15
7.48am BST07:487.48am BST07:48
Athens stock market won't open todayAthens stock market won't open today
Traders on the Greek stock market must be itching to get back to work after their three week delay. But they’ll have to be patient.Traders on the Greek stock market must be itching to get back to work after their three week delay. But they’ll have to be patient.
The Athens exchange will remain closed today, even though Greece’s banks are opening up to customers right now.The Athens exchange will remain closed today, even though Greece’s banks are opening up to customers right now.
According to spokeswoman Alexandra Grispou, the new capital controls degree issued on Saturday “doesn’t allow us to open today.”According to spokeswoman Alexandra Grispou, the new capital controls degree issued on Saturday “doesn’t allow us to open today.”
The exchange could open in a couple of days, according to Evangelos Charatsis, managing director of Beta Securities, a financial services firm.The exchange could open in a couple of days, according to Evangelos Charatsis, managing director of Beta Securities, a financial services firm.
He told Bloomberg TV that some staff took holidays once capital controls were imposed three weeks ago, adding:He told Bloomberg TV that some staff took holidays once capital controls were imposed three weeks ago, adding:
Others worked part time, then went to the beach.Others worked part time, then went to the beach.
7.38am BST07:387.38am BST07:38
Introduction: Greek banks reopening todayIntroduction: Greek banks reopening today
Good morning, and welcome to our rolling coverage of the Greek debt crisis.Good morning, and welcome to our rolling coverage of the Greek debt crisis.
Across Greece, banks are reopening after a three-week hiatus. Customers are flocking to their local branches for the first time since Alexis Tsipras’s fateful decision to call a referendum on the country’s bailout terms.Across Greece, banks are reopening after a three-week hiatus. Customers are flocking to their local branches for the first time since Alexis Tsipras’s fateful decision to call a referendum on the country’s bailout terms.
Greek banks to reopen for first time in 3 weeks. But long queues at ATM's remain as CNBC shows http://t.co/GzCWxQxQ1d pic.twitter.com/PVD8tFb3j3Greek banks to reopen for first time in 3 weeks. But long queues at ATM's remain as CNBC shows http://t.co/GzCWxQxQ1d pic.twitter.com/PVD8tFb3j3
But the situation remains far from normal, with capital controls still in place. Customers are only allowed to take out €420 per week (a slight tweak to the €60 per day limit).But the situation remains far from normal, with capital controls still in place. Customers are only allowed to take out €420 per week (a slight tweak to the €60 per day limit).
But as Associated Press explains, that’s only the start....But as Associated Press explains, that’s only the start....
Bank customers will still not be able to cash checks, only deposit them into their accounts, and will not be able to get cash abroad with their credit or cash cards, only make purchases.Bank customers will still not be able to cash checks, only deposit them into their accounts, and will not be able to get cash abroad with their credit or cash cards, only make purchases.
There are also restrictions on opening new accounts or activating dormant ones.There are also restrictions on opening new accounts or activating dormant ones.
Here’s our latest news story explaining the situation:Here’s our latest news story explaining the situation:
Related: Greek banks start to reopen for first time in three weeksRelated: Greek banks start to reopen for first time in three weeks
Today had (until recently) been inked in as the moment when Greece’s battle against bankruptcy floundered. It is is due to make a $3.5bn bond repayment to the ECB today (plus $700m in interest), which would have been impossible before last week’s bailout deal.Today had (until recently) been inked in as the moment when Greece’s battle against bankruptcy floundered. It is is due to make a $3.5bn bond repayment to the ECB today (plus $700m in interest), which would have been impossible before last week’s bailout deal.
Instead, the $7bn bridge loan agreed last week should arrive just in time to repay Greece’s creditors.Instead, the $7bn bridge loan agreed last week should arrive just in time to repay Greece’s creditors.
As Bloomberg explains:As Bloomberg explains:
Greece has reached the deadline it couldn’t afford to miss, for a bill it can finally afford to pay.Greece has reached the deadline it couldn’t afford to miss, for a bill it can finally afford to pay.
Greece’s Real Crisis Deadline Arrives With ECB Debt to PayGreece’s Real Crisis Deadline Arrives With ECB Debt to Pay
But this crisis isn’t over.But this crisis isn’t over.
Negotiations over Greece’s bailout are going to take several weeks, perhaps a month.Negotiations over Greece’s bailout are going to take several weeks, perhaps a month.
And Alexis Tsipras’s position remains precarious. Last Friday’s night’s reshuffle has sidelined several key dissenters, breaking the PM’s links to the far-left faction of Syriza and making an autumn election more likely.And Alexis Tsipras’s position remains precarious. Last Friday’s night’s reshuffle has sidelined several key dissenters, breaking the PM’s links to the far-left faction of Syriza and making an autumn election more likely.
Related: Alexis Tsipras reshuffles cabinet to get rid of bailout dissidentsRelated: Alexis Tsipras reshuffles cabinet to get rid of bailout dissidents
We’ll be tracking all the main events through the day....We’ll be tracking all the main events through the day....
Updated at 7.38am BSTUpdated at 7.38am BST