The European Council today adopted a decision granting up to €7.16bn in short term financial assistance to Greece under the European Financial Stabilisation Mechanism (EFSM).

The loan will have a maximum maturity of three months and will be disbursed in up to two instalments, and has been designed so that non-EU states bear no risk for their involvement.

Earlier, the German parliament voted in favour of starting negotiations on an €86bn bailout deal for Greece.

The motion passed with a clear majority - with 439 MPs in favour, 119 votes against and 40 abstentions.

Prior to the vote, Chancellor Angela Merkel warned of "predictable chaos" if the Bundestag did not back the plan.

The Greek parliament has already voted in favour of the hard-hitting austerity measures required by the Eurozone for a third bailout deal.

Without the bridging loan, Greece does not have the money to make a €4.2bn payment to the ECB that is due Monday.

While the ECB has also increased emergency funding to Greek banks by €900m for one week.

ECB president Mario Draghi said the money was offered following a request from the Bank of Greece.