Greece has taken a step back to normality after its banks reopened following three weeks of closures and receipt of a €7.2bn (£5bn) loan, with almost all of it spent on repaying debts.  Greek officials began paying back international lenders shortly after the emergency bridging loan arrived in the Greek government’s bank account on Monday.  The EU agreed the loan on Friday to enable Athens to meet urgent debt repayments and clear arrears, both necessary hurdles if the Greek government is to get a three-year bailout worth up to €86bn.  The money was transferred to Athens around noon (1000 BST) and was immediately used to repay Greece’s international creditors. The Greek government has begun making a €4.2bn payment to the European Central Bank, officials told Reuters – a €3.5bn loan plus €0.7bn interest. Failure to make this payment could have forced Greece out of the eurozone, as the ECB would have had to pull its support for Greek banks because it cannot back an insolvent country.  The Greek government also owes €500,000 to the central bank of Greece and must clear this debt so it is not indebted to the “eurosystem” – the central banks of the eurozone.  The International Monetary Fund confirmed it had received around €2bn from Greece, representing two missed payments. Greece became the first developed economy to default on an IMF loan when it missed a payment nearly three weeks ago, putting it in the company of Somalia, Sudan and Zimbabwe.  After 20 days, Greece is now out of that group, as a spokesman confirmed it was no longer in arrears. “The fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth,” he added.  Greek government officials are hoping the economy will get back to normal as the nation’s banks reopened, although capital controls remain in place.  Queues formed outside bank branches, with Greeks now able to withdraw up to €420 a week in one go, rather than being limited to €60 a day. But restrictions on sending money abroad and other controls have not been lifted. The Athens stock market is closed until further notice.  “Capital controls and restrictions on withdrawals will remain in place, but we are entering a new stage which we all hope will be one of normality,” Louka Katseli, head of the Greek banking association, said.  The German chancellor, Angela Merkel, told German radio at the weekend that the remaining capital controls were “not normal life” and showed the need for speedy negotiations on a proposed €86bn bailout for Greece.  The eurozone is pinning its hopes on reaching a deal with Athens by mid-August, which would allow Greece to pay €5bn of debt due that month using its new bailout fund rather than another emergency bridging loan.  Officials from Greece’s creditors known as the troika – the European commission, the ECB and the IMF – are expected to travel to Athens later this week to begin negotiations on a memorandum of understanding, the basic text of the bailout agreement. Their return to the Greek capital will underscore how Greece’s prime minister, Alexis Tsipras, has failed to significantly change the terms of the bailout deal.  But the Greek government still has several hurdles to clear before talks can officially get under way. By Wednesday, the Greek parliament must pass a law to overhaul its civil justice system, with the aim of speeding up processes and reducing costs. The government must also transpose the EU’s bank recovery and resolution directive into law. This law was part of Europe’s response to the 2008 banking crisis and should have been put into national law months ago.  The Greek parliament has already rushed through changes to its VAT system, another condition of securing the bailout. As of Monday, VAT on food and public transport is now 23%, up from 13%.
Officials confirm that almost all of €7.2bn bridging loan went into repaying money owed to the ECB and IMF