Athens ablaze as Greek MPs pass austerity package

IMF and eurozone insist on further cuts in exchange for £110bn bailout fund.

Athens was plunged further into crisis this weekend after Greek ministers passed a fresh austerity package in exchange for a £110bn eurozone and IMF bailout aimed at avoiding the government defaulting on its debt and forcing Greece to leave the euro. It is the second eurozone bailout Greece has received in the last two years.

The decision led to violent scenes on the streets of Athens as protestors opposing further austerity clashed with riot police, setting fire to over 40 buildings as social and political tension reached new heights. Angry at the latest measures, which include public sector job losses and wage and pension reductions, protestors rioted and looted on a scale rarely seen inside the Greek capital. The violence spread to towns and cities outside of Athens, including the islands of Corfu and Crete.

Teargas was fired by police as the demonstrators launched firebombs in Syntagma square where 40 policeman and dozens of citizens were injured. Cinemas, shops and banks were burnt in reaction to "the occupation" of politicians and lenders from outside Greece imposing sanctions to keep the country afloat. Protestors feel that the benefit from any subsequent bailout is outweighed by the long-term damage the cuts will have on the social fabric of Greece.

Greek prime minister, Lukas Papademos, had warned prior to the vote that the country would suffer untold damage if the package was not passed, claiming savings accounts would be lost and schools and hospitals would be closed. Analysts said that a Greek default would have endangered any prospect of a eurozone recovery.

In a speech to parliament before the vote took place he said: "Vandalism, violence and destruction have no place in a democratic country and won't be tolerated".

The measures were passed after a controversial vote in which MPs voted 199-74 in favour, with 43 ministers from the Socialist and New Democracy coalition expelled after the vote for either abstaining or voting against the party line. Earlier in the week, five ministers, including two from Pasok, had quit in opposition to further austerity.

Finance Minister Evangelos Venizelos said: "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse". Ministers from the eurozone will now convene on Wednesday in Brussels to ratify the measures before any bailout funds can be sanctioned.

Included in the latest austerity package are:

- 15,000 public-sector job cuts
- liberalisation of labour laws
- lowering the minimum wage by 20 per cent from 751 euros a month to 600 euros

The social unrest in Greece is now so severe that many question the country's ability to return to prosperity after five years of recession in which living standards have declined dramatically.