)
The European Union is rushing emergency funds to Athens to keep Greece afloat after the country was given another chance to build a future in the euro area.
The German parliament cleared the way for talks on a third bailout as Greek authorities prepared to reopen the country's shuttered banks. The Euro 7.2-billion ($7.8-billion) bridge loan slated to arrive by Monday will provide critical relief.
Read more from our special coverage on "GREECE CRISIS"
"What we are witnessing is European solidarity in action," Valdis Dombrovskis, EU Commission vice-president for euro policy, said Friday. "This agreement backed by 28 European Union member states prevents Greece from an immediate default."
After a week that began with some euro-area leaders resigned to cutting Greece loose, the pieces are falling into place for Prime Minister Alexis Tsipras to begin talks for a three-year rescue programme worth as much as Euro 86 billion. Still, there is no guarantee of success in the negotiations, which are bound to be long and difficult.
Greek lenders will reopen Monday after officials at the Bank of Greece and the European Central Bank ironed out technical problems during a Friday teleconference, a Greek central bank official said on condition of anonymity, in line with policy. The banks have been closed for three weeks.
IMF warning
International Monetary Fund Managing Director Christine Lagarde injected a warning, saying she disagrees with the EU over debt repayment terms for Greece. She reminded European leaders that they may still need to give more help to Greece.
The agreement to negotiate a bailout won't be enough to keep the euro region together unless Greece's creditors also lower the country's debt burden to boost its growth prospects, Lagarde said in a radio interview broadcast Friday.
Lagarde was asked in the interview on France's Europe1 radio station whether the accord is viable without the debt restructuring that hardliners like Germany, Finland and the Netherlands are resisting. "The answer is quite categorically not," she said.
Greece missed a payment to the IMF of about Euro 1.5 billion on June 30 after failing to meet the euro area's conditions for accessing more funding in time.
Extending repayment
Extending repayment periods or lowering interest rates may have to be the mechanism used, Lagarde said, since European leaders are refusing to consider reducing their claims on Greece.
German lawmakers cleared the way for talks on the third Greek bailout after Chancellor Angela Merkel warned that failing to try would be reckless and sow chaos. Finland's parliament gave its approval Thursday, while Austrian lawmakers also backed negotiations.
The bridge loan approved Friday will allow Greece to clear its arrears with the IMF and the Bank of Greece and to repay the ECB, according to an EU statement on Friday.
The European Stability Mechanism, managed by the 19 euro-area nations, released a statement saying its board approved the decision to grant the main bailout "in principle".
That step paves the way for the EU and IMF to negotiate with Greek authorities over the exact conditions the country will face as early as Monday. Once that is finalised, euro zone finance ministers and some national parliaments would again be called on to approve the accord before money could be released.
"I think there is enough time to reach agreement by the second half of August and I hope this is what we are going to do," the EU's Dombrovskis said.
