The EU approved a short-term bridge loan of EUR 7.16 B to Greece, which will allow the country to meet debt repayments to the IMF and ECB, while the agreement on a third bailout is still being ratified.

European Commission Vice-President for the Euro Valdis Dombrovskis announced that all 28 EU member states backed the agreement on a bridge loan, daily Kathimerini reports.

Greece has to make a debt repayment of EUR 4.2 B to the ECB on Monday and Athens is in arrears to the IMF having missed two installments, which fell due on June 30 and July 13.

The bridge loan will allow Greece to clear its debt to IMF and repay the ECB, while the contents of the bailout, which had been agreed between Athens and the leaders of the eurozone, are still under negotiation.

The bridge loan will be provided through the European Financial Stabilisation Mechanism (EFSM), which is an emergency rescue fund involving all 28 EU member states.

The duration of the loan will officially be for three months, but will only provide enough cash to keep Greece afloat until August 20, when Athens owes another huge debt repayment to the ECB.

The UK dropped its opposition to the bridge loan after it reached a deal that would protect it and other non-euro countries against potential losses.

On Monday, Greece and the leaders of the eurozone reached an agreement on granting a third bailout to the country in exchange for economic reforms, which Athens has to implement.

The Greek Parliament approved on Thursday the terms of the bailout, which foresee the implementation of new austerity measures.

The parliaments of other EU member states also have to approve the agreement, with the French Parliament and the German Bundestag already having voted in favour of the bailout.