German MPs have given Chancellor Angela Merkel the green light to resume talks on a new EU-IMF bailout deal for Greece, after she passionately argued it was the last chance to prevent “chaos” in the crisis-hit country.

Merkel, like Greece’s hard-left Prime Minister Alexis Tsipras, faced rebels in her own party ranks, but still won broad approval from the chamber where her “grand coalition” commands an overwhelming majority.

The measure to seek a new 86 billion-euro ($A126.32 billion) rescue package sailed through the Bundestag by 439 to 119 votes with 40 abstentions.

• It’s over: Greece strikes deal with creditors
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Addressing the chamber before the vote on Friday, Merkel had argued that “we would be grossly negligent, indeed acting irresponsibly if we did not at least try this path”.

It was Merkel, leader of the EU’s biggest economy and effective bailout paymaster, who spearheaded last weekend’s marathon Brussels talks that brought Greece back from the brink of crashing out of the euro, at the price of Athens accepting painful reforms.

The chancellor said there was “no doubt that the agreement of Monday morning was hard”, but urged MPs to back the deal, calling it “a last try”.

She said if a compromise over Greece had not been reached, it would have meant “watching on as the country virtually bleeds out, people no longer getting their money, where chaos and violence could be the result”.

Equally, “bending the rules until they’re worthless” was not an option, she said, arguing that for Europe this “would mean the end of a community bound by legal rules, and we wouldn’t agree to that”.

That was why, she said, “we are making a last try in tough, tenacious discussions” to seal a third aid package, “despite all the setbacks of the past six months and despite all legitimate scepticism”.

Greek prime minister Alexis Tsipras defends the painful bailout proposals. Photo: AAP

The German yes vote came a day after European Central Bank chief Mario Draghi boosted 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.

To prevent a catastrophic “Grexit”, parliament in Athens early on Thursday adopted sweeping reforms on pensions, taxes and labour laws that were harsher than those Greeks had rejected in a July 5 referendum.

The about-face sparked violent street protests and speculation of early elections in Greece, where the hard-left Syriza party came to power in January polls.

Eurozone ministers rewarded Greece on Thursday by approving a vital seven-billion-euro bridging loan and backing resumed negotiations.

Merkel and her hardline Finance Minister Wolfgang Schaeuble have been harshly criticised for forcing more austerity on Greece, using the threat of a five-year euro “time-out” that had been floated by Schaeuble.

Merkel, sometimes accused of lacking empathy amid the eurozone crisis, on Friday touched on the suffering of the Greek people, for which she blamed the Tsipras government.

“Imagine just for a moment what it would mean here in Germany if desperate pensioners had to queue up in front of shuttered banks to wait for their 120 euros a week,” she said, speaking on her 61st birthday.

If many commentators see Merkel as being too hard on Greece, dissenters at home complain she has been too soft, leaving German taxpayers to lend out billions they are unlikely to ever see again.

The mass-circulation Bild daily, which has long campaigned for a Grexit, on Friday published a list of “seven reasons” to vote no and wrote that “today politicians must show their true colours”.

Germany is one of several EU countries whose parliaments must sign off of any debt deal for Greece.

The German vote was only about resuming official talks – a final deal with Greece will also need the assembly’s approval.

The public mood was mixed between pro-European sentiment and anger with the Greek government.

A new Forsa poll Friday found 53 per cent of respondents backed new talks, while 42 per cent were against.

– AFP