Greece approves austerity measures

The Greek Parliament voted in favour of the austerity measures with 199 votes for and 74 against. Coalition parties expelled more than 40 deputies for failing to back the bill.

Tens of thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.

Protesters outside parliament threw stones and petrol bombs, and police responded with tear gas. Scores of police and protesters were injured.

Prime Minister Lucas Papademos urged calm, insisting that the austerity package would "set the foundations for the reform and recovery of the economy".

"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he said in a speech in parliament before the vote.

The bill passed parliament easily as the two largest parties in the coalition - Pasok and New Democracy - account for more than two-thirds of the deputies.

The austerity measures include:

• 15,000 public-sector job cuts
• liberalisation of labour laws
• lowering the minimum wage by 20% from €751 a month to €600

Eurozone ministers must now ratify the measures at a meeting in Brussels on Wednesday before bailout funds can be released.

The ministers rejected proposals put forward by the Greeks last week, which they said fell €325million short of the cuts needed.

At least 80,000 people were reported to have joined demonstrations in Athens, with another 20,000 protesting in Thessaloniki

Running battles with police continued in the capital until late on Sunday, although no new clashes were reported after the vote.

Protesters hurled flares and chunks of marble torn up from the square. Some had tried to break through a cordon of riot police around the parliament.

Several historic buildings, including cafes and cinemas, were set alight.

Violent protests also spread to other Greek towns and cities, including the islands of Corfu and Crete, according to state TV.

Finance Minister Evangelos Venizelos said the question was not "whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions".

"When you have to choose between bad and worse, you will pick what is bad to avoid what is worse," he said.

Greece needs the bailout the make its next repayment on its huge sovereign debt.

If it cannot make the payment, it will default and in effect become bankrupt.

Analysts say such a "chaotic default" could endanger Europe's financial stability and possibly even leading to a break-up of the eurozone.

As part of the deal with international lenders, Greece will also be able to write off €100 billion of privately held debt.

Earlier this week several ministers from the coalition government, including two from Pasok, quit in protest at the measures.

The leader of the far-right Laos party, the junior coalition member, announced his 15 deputies would not back the austerity measures.

George Karatzaferis complained that the measures amounted to Greeks being "humiliated" by Germany.

The eurozone bloc has demanded "strong political assurances" that the packages will be implemented regardless of which party wins a general election due in April.