For the first time in three weeks, Greek banks opened for business; but for account holders, that renewed access to cash comes at a price.

Although doors opened and ATMs were stocked, Greeks looking to cash out were met with the continuation of withdrawal restrictions of 60 euros per day; the government slightly relaxed the rules put in place during its negotiations with the rest of the Eurozone, and set an additional 420 euro per week limit, eliminating the need for daily runs on ATM machines and bank tills. Checking transactions are limited to deposits, and account holders are still restricted from taking out cash while abroad.

Shoppers saw a 10% hike in the country’s VAT tax approved by parliament on Thursday; parliament also agreed to reforms of pension and early retirement programs that have Greek citizens worried.

The Wall Street Journal has on the ground coverage:

Of course, those worrisome cuts were demanded by creditors for very good reasons.

On Friday, the European Union released a 7.16 billion euro loan aimed at helping Greece make its loan payments to the European Central Bank and International Monetary Fund; if not for that loan, Greece would sink further into arrears with its creditors. This has caused problems for Prime Minister Alexis Tsipras and other government officials, who are already feeling pressure from their left wing colleagues to reject austerity measures:

Last week’s austerity package caused a split in the ruling Syriza party, but passed comfortably because of opposition support. Among the 149 lawmakers in Mr. Tsipras’s party, 32 voted against the measures—including three cabinet ministers and former finance chief Yanis Varoufakis—while six abstained.

Mr. Tsipras announced a cabinet shuffle Friday to bring in ministers who would support his government’s quest for a new bailout deal.

To avoid more defections in a parliamentary vote on additional austerity measures, the government decided not to include new increases in taxes on farmers and new regulations on early retirements, which both Syriza and opposition lawmakers had threatened to reject. Parliament has the coming months to get those measures through.

Government officials in Greece say they now expect elections this fall if negotiations on a new bailout program are completed by then.

We’ll keep you updated on the economic situation as it develops.


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