Germany to vote on Greek bailout in crucial test for deal

Germany is one of several eurozone states that must give the green light to the 86 billion euro rescue package agreed

Germany's parliament prepared to vote on a fresh Greek bailout today, 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.

Read more from our special coverage on "GREECE CRISIS"

• Merkel urges conservative MPs to back Greek debt deal
• Faith-based currency
• Greece licks wounds after bailout vote, ECB move expected
• Greek parliament approves bailout measures as Syriza fragments
• Violence as Greece debates reforms needed for bailout

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 yesterday.

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.

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.