If the deal fails, Greece’s banks face collapse and the country could then be forced to leave the euro.
This was “in case we do not find another solution” for financing Greece until mid-August, one official said.
Eurozone parliaments have begun approving the bailout, but some still would prefer Greece itself to opt for a “timeout”.
Mark Harbers of the Liberal Party deflected criticism of the broken pledge by telling lawmakers in a debate Thursday that he can only give an opinion on the deal once all details have been pinned down by eurozone negotiators and Greece. There were 40 abstentions.
Though the broad outlines of the bailout were agreed Monday, specific terms will now be thrashed out between Greece and its European creditors.
It is also in arrears on about 1.5 billion euros owed to the global Monetary Fund since June 30.
But with Greece’s debt load continuing to rise amid a declining economy, many economists say that strategy wouldn’t be enough to put the country’s finances on a sustainable path.
“This agreement establishes an important principle in European Union law: that the responsibilities of the euro zone countries and those members of the European Union, like Britain, who are not part of the single currency and do not want to be, are very different, Osborne said”.
But a person familiar with the U.K.’s position said the country would be fine with the use of EU-wide funds as long as British taxpayers were protected from any losses.
“We have not received a proposal and one is not on the table“.
Bailing out Greece hasn’t been popular in Ms Merkel’s conservative bloc and 60 of its policy-makers failed to back her today, with another five abstaining.
“There is an agreement in principle on EFSM-based bridge financing”, Valdis Dombrovskis, the European Commission vice president in charge of the euro, wrote on his Twitter account.
Prime Minister Alexis Tsipras managed to push through a series of unpopular reforms demanded by the country’s global creditors, despite scenes of anger over austerity in Athens, where protesters threw firebombs at police. He still won an overwhelming majority as three opposition pro-European parties backed the proposals.
Pierre Gramegna, Luxembourg’s finance minister, says Europe showed progress in the months of discussions on Greece – which culminated in a 17-hour special summit of the 19 eurozone leaders.
The first visible sign of economic healing in Greece will emerge when the banks open their doors again.
Greek banks, which have been closed for almost three weeks, could also reopen on Monday, Greek media reported, although credit controls will remain in place.
He said the four biggest Greek banks are “system-relevant”, code for significant to the global financial system, and that if they fail that would have “severe effects not just for Greece itself… but for the eurozone as a whole”.
However, an European Union official told The Times that the decision was merely “political” and “it can be argued that it does not prevent the activation of the mechanism”.