European Union to provide Greece with 7-billion-euro bridging loan

The EU approved a short-term loan of 7.16 billion euros ($7.8 billion) to Greece allowing it to meet a huge payment to the ECB and repay the IMF while a new bailout is still being ratified, the EU's top official for the euro said Friday.

"We have an agreement on bridge financing.... This agreement is backed by the 28 member states," Commission Vice President Valdis Dombrovskis told

Greece must pay the European Central Bank a huge debt payment of 4.2 billion euros as early as Monday, and is in arrears to the IMF.

The bridging loan allows Greece to clear its debt to the IMF and to repay the ECB while the modalities of a fresh bailout, agreed in principal by European leaders on Monday July 20,2015, is still under negotiation

The loan will be given through the EFSM, a rescue fund set up at the time of Greece's first bailout in 2010 but that involves the whole of the 28-nation EU, not just the 19 eurozone members.

The loan will officially be for three months, but only provide enough cash to hold Greece over until August 20, when the country owes the ECB another huge debt payment