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Greece passes key austerity vote Greece passes key austerity vote
(40 minutes later)
The Greek parliament has narrowly voted in favour of a drastic package of austerity measures intended to save the country from defaulting on its debts. The Greek parliament has voted in favour of a drastic package of austerity measures intended to save the country from defaulting on its debts.
The proposed tax hikes and spending cuts have been deeply unpopular with the Greek public.The proposed tax hikes and spending cuts have been deeply unpopular with the Greek public.
A nationwide 48-hour strike is under way and violent clashes are continuing in the streets of the capital, Athens.A nationwide 48-hour strike is under way and violent clashes are continuing in the streets of the capital, Athens.
Greece is heavily in debt and the package is needed to win the latest tranche of a 110bn-euro (£98bn) loan.Greece is heavily in debt and the package is needed to win the latest tranche of a 110bn-euro (£98bn) loan.
There will be a second vote on Thursday for the implementation of different parts of the package, such as tax rises and the sale of state assets. MPs passed the measures by 155 votes to 138.
They will hold a second vote on Thursday aimed at changing a law allowing the package to be implemented.
'No time to step back'
Ahead of the vote, PM George Papandreou urged MPs to approve the package by consensus.Ahead of the vote, PM George Papandreou urged MPs to approve the package by consensus.
He says his austerity plan is the only way to get Greece back on its feet. href="/nol/shared/spl/hi/dhtml_slides/css/v3/styles.css" rel="stylesheet" type="text/css" />

class="dslideshow-header">Greek tragedy
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Total Greek debt
Greece is about to get a second bail-out from the EU, aimed at helping pay its debts until 2014. It also has to agree more cuts as part of the deal.
The economy
The Greek economy is in dire straits. Retail sales have fallen 18% since 2008 and manufacturing output has dropped 30% in the same period.
Working population
Greeks retire on average at 61. Tax evasion is widespread. Until 2010, public sector workers received two months extra pay a year in bonuses.
EU demands
To meet EU demands, Greece must sell 50bn euros-worth of public assets by 2014, equal to 20% of GDP. Public sector pay is being cut 15%.
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He had faced wavering support from within his governing Panhellenic Socialist Movement (Pasok), which has a slim majority, with 155 seats out of 300 in parliament. But in the end, only one Pasok deputy voted against the package.
Mr Papandreou says his austerity plan is the only way to get Greece back on its feet.
"We must avoid the country's collapse at all costs. Now is not the time to step back," he told deputies."We must avoid the country's collapse at all costs. Now is not the time to step back," he told deputies.
Had his 28bn-euro austerity package been rejected, Greece could have run out of money within weeks. Were his 28bn-euro austerity package to be rejected, Greece could run out of money within weeks, as the EU and the International Monetary Fund want the measures implemented before they release more funds to help Greece pay off its vast debts.
As the vote was held, protesters clashed with riot police outside parliament; earlier, demonstrators tried to prevent MPs from entering the building. But tensions are running high in Greece, where unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts that have seen unemployment rise to more than 16%.
Sporadic clashes are continuing between masked protesters and riot police outside parliament.
Shortly after the vote, dozens of rioters using ladders broke into the first floor of an office building near parliament on Syntagma Square before being driven out by police, witnesses said.
'Unfair but necessary'
The vote covered the first part of Greece's austerity package, focusing on raising taxes to secure some 14.09bn euros over the next five years and introducing 14.32bn euros in public spending cuts.
The package is needed to secure the next instalment of the country's 110bn-euro bail-out to be released by the EU and IMF.
Ahead of Wednesday's vote, the governor of Greece's central bank, George Provopoulos, said a 'no' vote would be "suicide" for the country.
Thursday's vote is over the implementation of different parts of the package, such as tax rises and the sale of state assets.
Once passed, European officials will start to finalise the details of a second bail-out, worth an estimated 120bn euros, designed to help Greece pay its debts until the end of 2014.
The impact of the Greek vote would be felt worldwide said Herman Van Rompuy, president of the EU Commission, on Tuesday.
Recently-appointed Finance Minister Evangelos Venizelos acknowledged that the cuts were "unfair", but absolutely necessary.
But the main opposition leader, Antonis Samaras of the New Democracy party, said the thinking behind the austerity package was flawed, and that tax rates should be lowered rather than raised in order to stimulate the economy.
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