7 November 2012 Last updated at 18:27 ET
Lawmakers in Greece have narrowly backed a fresh round of austerity measures, despite violent protests across the country.
The austerity package aimed at securing the next round of bailout funds was passed with 153 MPs in favour – a majority of just three.
The 13.5bn-euro ($ 17.3bn; £10.5bn) bill includes tax rises and pension cuts.
Earlier, riot police fired tear gas towards protesters when they were attacked with petrol bombs in Athens.
Prime Minister Antonis Samaras warned before the vote late on Wednesday that without the bailout Greece would run out of money this month and face “catastrophe”.
The austerity package – Greece’s fourth in three years – is meant to close the nation’s budget deficit, lower its huge debt burden and make its economy more competitive.
“Start Quote
Many of these measures are fair and should have been taken years ago, without anyone asking us to”
End Quote Antonis Samaras Greek PM
But the level of resistance on the streets is a reminder that implementing the measures will be extraordinarily difficult, the BBC’s Mark Lowen in Athens reports.
The approval of the bill means that Greece will stay afloat, but the decision will go down very badly among this exhausted nation, our correspondent adds.
Samaras’s warning
The crucial vote was held after a lengthy debate in the 300-strong parliament.
Immediately after the bill was adopted, co-governing New Democracy and Pasok parties expelled seven lawmakers from their ranks for failing to back the package.
The adopted plan includes a two-year increase in the retirement age from the current average of 65, as well as salary cuts and labour market reforms, including cuts to holiday benefits, notice periods and severance pay.
Measures in austerity package
- Retirement age up from 65 to 67
- A further round of pension cuts, of 5-15%
- Salary cuts, notably for police officers, soldiers, firefighters, professors, judges, justice officials; minimum wage also reduced
- Holiday benefits cut
- 35% cut to severance pay
- Redundancy notice reduced from six to four months
Workers fear this will just make it easier and cheaper for them to be fired at a time when unemployment has already soared to 25% and a five-year recession means there are few job prospects.
“Many of these measures are fair and should have been taken years ago, without anyone asking us to,” Mr Samaras said.
“Others are unfair – cutting wages and salaries – and there is no point in dressing this up as something else,” the prime minister said, adding that Greece was, nevertheless, obliged to take the measures.
Mr Samaras has said that without this money, which will be used largely to recapitalise the country’s banks, the country will be bankrupt by 15 November.
The vote on the cuts will be followed by a second vote this Sunday on Greece’s revised budget for 2013.
A positive vote on both is required for Greece to secure 31.5bn euros in fresh loans from the European Union (EU) and the International Monetary Fund (IMF).
‘Mother of all strikes’
Earlier on Wednesday, tens of thousands of protesters held a rally in Syntagma Square – outside the parliament building in the heart of the capital.
Key dates
- 6-7 Nov General strike
- 7 Nov Vote on austerity package
- 11 Nov Vote on budget
- 12 Nov Eurozone finance ministers to discuss releasing new cash for Greece
- 16 Nov Deadline for Greece to repay 5bn euros in debt
The protesters chanted: “People – don’t bow your heads!”
Some in the crowd held giant flags of Greece, Portugal, Italy and Spain – four of the eurozone’s most heavily-indebted states.
The riot police – who sealed off parliament – later fired tear gas after the demonstrators attacked them with petrol bombs and flares.
Protests also took place in other big cities across Greece.
The Greek unions were staging what they described as the “mother of all strikes” – a 48-hour walkout which culminated on Wednesday.
The third major strike in just two months brought public transport to a halt and shut schools, banks and government buildings.
BBC News – Business
Greece MPs back austerity cuts
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