Greece passes key austerity vote

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.

Greece is heavily in debt and the package is needed to win the latest tranche of a 110bn-euro (£98bn) loan.

MPs passed the measures by 155 votes to 138.

They will hold a second vote on Thursday aimed at law reforms that would allow 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.

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.

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.

Top EU officials welcomed the result as a "vote of national responsibility", saying it had pulled Greece away from the "very grave scenario of default" while paving the way for a second aid package.

"The country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform," European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said in a joint statement; Kazinform cites BBC News.

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