International Monetary Fund and European Central Bank confirm Greece payment

Life was expected to begin returning to normal in Greece today - although challenges still remain (Source: Getty)

Greece has paid off its arrears to the International Monetary Fund (IMF) and the European Central Bank (ECB) today after it became the proud recipient of a €7.16bn (£5bn) emergency bridging loan from the European Union today.

European markets clised slightly higher, with the FTSE 100 closing 0.2 per cent up, Dax 0.53 per cent up and Cac 0.35 per cent up.

Greece's payment to the ECB was confirmed by the bank in a tweet early this evening stating the debt had "been repaid".

The country owed a total of €4.2bn to the bank - as well as €600m its government owes to the Greek central bank.

In a statement earlier today, IMF director of communications Gerry Rice confirmed the payment.

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

The last chunk of cash from the bridging loan - another €300m-odd - will go to an escrow account designed to act as a guarantee to the non-Eurozone countries which are sending cash to Greece through the European Financial Stability Mechanism.

The news comes after Greek banks reopened this morning, although consumers in Athens are still subject to withdrawal limits - but rather than the €60 (£40) a day they've been limited to over the past few weeks, that figure has increased to €420 a week. However, transfers of money abroad and cashing cheques are still banned.

At the same time, new rules including a VAT hike from 13 per cent to 23 per cent came into force.

Despite the good news, European markets didn't seem convinced that this heralded the beginning of the end of the Greek crisis. The FTSE 100 rose a modest 20 points, or 0.3 percent, in lunchtime trading, while the Cac 40 was up 40 points or 0.8 per cent and the Dax was up 112.7 points, or one per cent.

Connor Campbell, a financial analyst at Spreadex. suggested markets are aware "everything isn't hunky-dory".

Greek Prime Minister Alexis Tsipras still faces an "uphill battle" to hold on to his job, and Greece must still negotiate a bailout loan worth as much as €86bn.

"That will likely take weeks to materialise, meaning the already arduous Greek saga is set to enter one of its more prolonged moments of speculation," said Campbell.

Negotiations could be slowed by disagreements between those at the table over the possibility of a writedown on Greece's debt. While both Greece and the International Monetary Fund (IMF) have urged lenders to reduce its debt burden, over the weekend German Chancellor Angela Merkel showed reluctance.

"Greece has already been given relief," she said in an interview with German broadcaster ARD.

"We had a voluntary haircut for the private creditors and we then extended maturities once and reduced interest rates.

"Once the first successful review of the programme to be negotiated has been completed, then exactly this question will be discussed - not now, but then."

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