Greece’s parliament is to hold a second vote on its austerity programme, which it needs to implement to secure the country further financial support.
The vote is about putting into practice the tax hikes, pay cuts, privatisations and public sector redundancies approved in principle on Wednesday.
The vote was a retreat from the “grave scenario of default”, the EU said.
Public reaction has been very hostile, and the debate has been accompanied by strikes and violent protest.
Clashes continued on Syntagma (Constitution) Square outside parliament overnight, as police fired tear gas at stone-throwing youths.
Protesters set fire to a post office in the finance ministry building, on another part of the square.
But Athenian street cleaning crews have now come out in force removing debris from two days of battles in the square, says the BBC’s Malcolm Brabant in Athens.
Police have restricted access to the city centre to prevent demonstrators from obstructing members of parliament heading to vote on the new law.
- Debate starts at 0930 local time (0630 GMT)
- Vote itself not before 1400
- Roll-call vote with verbal response by MPs
- Possible additional votes on individual articles
- Government has a majority of eight over all other parties
Some Athenians have accused the police of heavy-handed tactics, and newspapers have railed against what one called “an orgy of state terror”, our correspondent says.
Some accused the police of over-using tear gas.
Scores of people were treated for injuries and severe breathing problems.
MPs are not expected to vote before 1400 local time (1100 GMT), and it is not clear how many votes will need to be held to push the measures through.
Government officials say they are confident that those who supported them in Wednesday’s vote, when the package was approved in principle by 155 votes to 138, would also vote for implementation, known as enabling legislation.
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 Greek economy is in dire straits. Retail sales have fallen 18% since 2008 and manufacturing output has dropped 30% in the same period.
Greeks retire on average at 61. Tax evasion is widespread. Until 2010, public sector workers received two months extra pay a year in bonuses.
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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Its measures include:
- The setting up of a privatisation agency
- Preparation for privatisation of state-owned real estate
- Tax increases
- Curbs on public sector recruitment
- Social security regulations
The opposition New Democracy party, which voted against the government on Wednesday, has said that it will support some elements of the bill involving privatisation and spending cuts.
The vote will enable Greece to receive the latest tranche of a 110bn-euro (£98bn) loan in time instead of defaulting.
But analysts say the real challenge will come after the loan is secured, and there is concern about whether the austerity measures can be effectively implemented in the face of so much public hostility.
Wednesday’s vote prompted a furious response from protesters in Athens.
Sporadic violent clashes were continuing in the capital in the early hours of Thursday between masked protesters – armed with stones and sticks – and riot police firing tear gas and stun grenades.
Despite the unrest, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy welcomed the result as a “vote of national responsibility” paving the way for a second aid package.
- June 29: Parliament approves new austerity package
- June 30: MPs to vote on details of implementing package
- July 3: EU will sign off latest bail-out payment to Greece – 12bn euros – if both votes are passed
- July 15: Without the 12bn euros, Greece will default
The package of tax rises and budget cuts – worth about 28bn euros over five years – had been championed by Greek Prime Minister George Papandreou.
Had it been rejected, Greece could have run out of money within weeks. The EU and the International Monetary Fund have demanded that the measures are implemented before they extend further loans to Greece.
Greek 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%.
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.