Greek parliament approves severity bill

The Greek parliament has approved an severity package by a slim majority to slash $40bn off the national debt.

Wednesday's poll saw 155 members of parliament vote in favors, 138 against and 5 abstentions.

The package of taxes, spending cuts and privatizations has angered many Greeks, with thousands taking to the streets as part of a 48-hour national strike protesting against the bill.

Parliament will grip a second vote on Thursday expected at changing a law allowing the measures to be implemented.

George Papandreou, the Greek prime minister, has said the second bailout will be roughly equal a previous package last year.

Papandreou expelled a Greek ruling party deputy who voted against the austerity package.

The five-year severity package will allow Greece to secure a second bailout of $17bn of emergency loan funds on top of last year's $157bn bailout.

 

The poll took place as clashes between police and protesters broke out outside parliament, with the booms of stun grenades and tear gas resonating across the square outside the building.

Riot police fired up volleys of tear gas at swarms of young men who were hurling rocks and other debris as well as setting fire to rubbish containers.

Police with truncheons rarely charged the demonstrators, but pulled back just as swiftly. As stun grenades boomed and flashed, many members of the crowds jeered and booed.

The majority of the anti-government protesters who marched to the square stayed clear of the fighting, but they vented their anger at the political establishment with chants and insults.

EU officials have called on Papanderou to draw the widest possible support. Christine Lagarde, named as the next head of the International Monetary Fund, called on Greece's opposition parties to offer support. The IMF provides about 30 percent of Greece's bailout fund.

European Commission President, Jose Manuel Barroso and European Council President, Herman Van Rompoy said in a statement that the Greek parliament's approval of the bill is a "vital step back" from a debt default.

The euro rose against the dollar after the parliament accepted the severity measures needed to avoid a default, though concern over whether the government can implement them could limit gains.