| 10.5°C Dublin

Video: Greece set to pass new austerity measures as backlash continues

A public backlash against Greek austerity measures continued today as MPs in Athens voted on law reforms to activate yesterday's deal on tax rises, pay cuts and 150,000 public sector redundancies.

Running street battles between demonstrators and police near the parliament have marked the tortured efforts of prime minister George Papandreou to hold the line and get enough support for measures to stave off bankruptcy.

Today's vote should agree the necessary law changes to implement cuts designed to generate €27bn by 2015 to help offset a massive deficit

After voting through a new austerity package yesterday the Athens parliament today votes on changing the law to implement the measures.

But a 48-hour strike and the violence of the protests have raised fears of widespread public defiance.

The austerity deal is a condition for receiving the next €11.8bn instalment of a €106bn Greek bail-out programme from the EU and the IMF.

The 155-138 vote for austerity was welcomed in Brussels as the only option for a Greek economy still on the slide.

Greece needs nearly €4.5bn of the latest bail-out instalment by July 15 to pay its most pressing debts.

If the necessary law changes to impose the austerity package go through, eurozone finance ministers are likely to clear the latest bail-out payment at talks in Brussels on Sunday.

Another meeting on July 11 will then consider giving Greece a second massive bail-out worth more than €110bn later this year.

The new austerity package voted through yesterday was hailed as a "vote of national responsibility" by European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy.

In a joint statement they said: "With approval by the Greek Parliament of the revised economic programme, the country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform. But it has also taken a vital step back - from the very grave scenario of default."

The statement said approval of the necessary implementing legislation would not only pave the way for paying the latest tranche of the current bail-out, but would also allow "rapid" work on a second package of financial assistance, "enabling the country to move forward and restoring hope to the Greek people".

But the EU and the IMF are determined not just to save Greece, but restore the credibility of the single currency and prevent euro "contagion" spreading to other struggling member states, including Ireland and Portugal.

PA Media