Greece's parliament narrowly passed a crucial austerity bill late Wednesday as violence rocked Athens with tens of thousands protesting the measures that threaten to further erode the standard of living of for poor and middle class Greeks, dpa reported.
Passage of the bill with 153 votes in the 300-seat parliament was a major hurdle for the coalition government to secure continued funding from its international lenders and avert immediate bankruptcy.
For the more than 70,000 protesters who defied heavy thunderstorms outside parliament, the bill will mean a further blow to the economy, which is about to enter a sixth year of recession with unemployment at a record 25 per cent.
Hundreds of hooded youths hurling Molotov cocktails and chunks of marble clashed with police, who responded with tear gas.
"They have already cut my pension from 2,250 euros (2,870 dollars) to 1,250, and now I risk even further cuts. They do not understand that on this pension I am supporting my wife and three unemployed children," said Grigoris Vasiliou, 70, a retired banker protesting outside parliament.
"The austerity measures which are going to be voted on in parliament are a shame for every family, for Greece and for Europe."
Parliamentarians passed the budget cuts worth 13.5 billion euros with heavy dissent from within the three-party governing coalition against further reductions to pensions and salaries along with tax hikes.
Two of the coalition parties, the conservative New Democracy and socialist PASOK, expelled a total of seven dissenting deputies from their ranks for voting against the bill.
Ahead of the vote, Prime Minister Antonis Samaras said Greece must decide whether to stay in the eurozone or return to the drachma.
"Today we face the most critical decision any government has taken in the past 37 years," he told parliament.
"We choose whether we want to stay in the eurozone or return to the drachma. This is the choice we must make. ... Many of the measures are fair and should have been taken years ago, while others are unfair like cutting wages and salaries ... but the alternative is much worse than any of these measures."
Lawmakers needed to approve the package agreed to with Greece's international lenders - the European Commission, European Central Bank and International Monetary Fund - for the government to continue receiving bailout loans.
The next loan installment of 31.5 billion euros is long overdue. Without it, Greece is slated to declare bankruptcy on November 16.
The measures include additional pension and public-sector cuts and tax hikes, a two-year increase in the retirement age to 67 and legislation that will make it easier to sack civil servants.
"I was supposed to retire in the next decade but now that does not seem like a possibility anymore," said 54-year-old public power employee Christos Zorbas, who has been working for the government electricity provider for 33 years and has already seen his salary slashed by 35 per cent.
The law gives the government the right to cut the minimum wage, reduces the redundancy notice period and limits compensation for workers with more than 16 years of service.
"We should now be called the 400-euro generation. There is no future for me in this country anymore. Who is going to hire me when I graduate when unemployment is already more than 25 per cent?" asked Efi Stragiadi, 21, a journalism student.
The measure gives shop owners the right to ask employees to work more flexible hours, paving the way for Sunday openings.
Hours before the bill was scheduled to go to a vote, the debate was briefly interrupted as parliament workers went on strike to protest cuts to their wages suggested by Finance Minister Yannis Stournaras.
The finance minister later withdrew the proposed salary cuts.
The vote took place during the second day of a two-day nationwide strike that disrupted public transport and closed schools, tax offices and health services.
Ferry and train services have been cancelled until Thursday, and flights were affected by a four-hour work stoppage by cabin crew.