Germany's parliament prepared to vote on a fresh Greek bailout on Friday, a crucial test of support for the deal after ECB boosted emergency aid to the crisis-hit country and eurozone nations agreed to crucial short-term funding.
Germany is one of several eurozone states that must give the green light to the 86 billion euro ($94 billion) rescue package agreed this week to save Greece from financial collapse, its third bailout in five years.
On the eve of the Bundestag vote, German Chancellor Angela Merkel told conservative lawmakers -- some of whom are refusing to back more aid for crisis-hit Greece -- she was "absolutely convinced" the new reform package was the way forward.
The measure is expected to pass with a clear majority in the Bundestag lower of house of parliament on Friday, even if Merkel is facing growing disaffection within her CDU/CSU parties over lending more money to the country.
The vote comes after European Central Bank chief Mario Draghi agreed to increase a vital cash lifeline to Greece's struggling banks that will allow them to open their doors for the first time in almost three weeks on Monday.
Athens shuttered banks and imposed capital controls at the end of last month limiting withdrawls to 60 euros a day, bringing the economy to a virtual standstill and forcing Greeks to queue for hours for cash.
"From Monday, citizens can go to the bank counters and make any kind of transaction," Deputy Finance Minister Dimitris Mardas told ERT public television late Thursday.
Meanwhile, eurozone ministers approved the launch of vital bridge financing and more bailout talks after lawmakers in Athens grudgingly passed tough reforms to taxes, pensions and labour rules demanded by creditors.
"The Eurogroup welcomes the adoption by the Greek Parliament of all the commitments specified in the Euro Summit statement" reached in marathon talks last weekend, the eurozone's finance ministers said.
The European Commission, the bloc's executive arm, agreed in theory to grant Greece a three-month 7.0-billion-euro bridging loan to keep its economy afloat until its new bailout is ratified.
Debt relief in vote
The vote in Germany -- Greece's biggest EU creditor and the driver of austerity in the bloc -- is due to start at 0800 GMT and is expected to be a far stormier than in France and Finland, which have already approved the deal.
Finance Minister Wolfgang Schaeuble, who has been panned in Greece for his hard line in months of debt talks, has urged lawmakers to back the reform package, but remained intransigent on any further debt relief.
"A real debt haircut is irreconcilable with membership in a monetary union," Schaeuble insisted on Deutschlandfunk public radio.
The IMF, one of Greece's creditors alongside the EU and the ECB, caused a stir with a bombshell report criticising the deal and warning that lenders would have to go "far beyond" existing estimates for debt relief.
And on Thursday Draghi added his voice to calls for debt relief for Greece -- whose debts amount to 180 percent of economic output -- saying the main question at this stage was what form this relief should take.
Athens has already failed to make two key payments to the International Monetary Fund and its next debt deadline is a 4.2-billion-euro payment to the ECB itself on July 20, a deadline Draghi said he was sure would be met.
Speaking in Frankfurt, the ECB chief also said the conditions were "in place" to raise the ceiling on the Emergency Liquidity Assistance (ELA) available to Greek banks, despite questions about their solvency.
The ELA -- which has kept Greek banks, and by extension the economy, afloat -- has been fixed at around 89 billion euros since late June, but would be topped up with an additional 900 million euros, Draghi said.
Greek Prime Minister Alexis Tsipras on Wednesday faced down a major mutiny in his radical left Syriza party and violent protests in the streets of Athens to win parliamentary approval for the tough reforms by creditors.
Tsipras said the 32 MPs from his own Syriza party who had voted against the package had contradicted "the principles of friendship and solidarity at a critical time," and left the party "bruised," a government source quoted him as saying.
But the Eurogroup, led by the no-nonsense Dutch Finance Minister Jeroen Dijsselbloem, was encouraged by the outcome.
Dijsselbloem said the raft of reforms approved by the Greek parliament were a first step to "start to rebuild trust" as he called for urgent foreign investment to help Greece's debt-ridden economy return to growth.
A spokeswoman for the European Commission said the vote was "an important step toward rebuilding trust with Greece's international partners".
The EU's executive arm also green-lighted a bridging loan for Greece through an EU-wide crisis fund to hold Athens over until its new bailout is ratified. A compromise agreement is expected to be finalised on Friday.