The victory should ensure the European Union and International Monetary Fund release a vital €8 billion ($11 billion) loan tranche which the government needs to keep paying its bills past November. The mix of deep pay and pension cuts, tax hikes and changes to collective bargaining agreements has been bitterly opposed and at least 70,000 people joined protests in Athens' Syntagma Square in front of parliament.
Papandreou now flies to Brussels for a meeting of European leaders on Sunday to try to prevent the debt crisis spinning out of control. A second summit is also expected to be held on Wednesday. "We are at a critical point, not only for us but for European history. I have never, in my memory, heard before from leaders of major European countries that there is danger of Europe coming apart", Papandreou told a cabinet meeting before the vote.
Hostility to the new austerity measures has also imposed a severe strain on the ruling PASOK party and Papandreou expelled Louka Katseli after she voted against an article in the bill restricting collective wage agreements. "Today's vote is not a matter of party discipline, it's an issue of national responsibility", Papandreou said in a letter read out by the house speaker.
Two other deputies who had threatened to rebel bowed to pressure from party leaders but deep unease remained at measures many feel punish the weak and will only drive the stricken economy further into the ground.
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