Greece's government voted by a razor thin margin on Thursday to approve an austerity package needed to unlock vital aid and avert bankruptcy, despite internal rift and violent protests at the parliament gates.
Lawmakers approved the spending cuts, tax hikes and measures making it easier to hire and fire workers after nearly 100,000 Greeks waving flags and chanting "Fight! They're drinking our blood!" at the Syntagma Square in central Athens.
Despite the abstention of their junior ruling partner, the Democratic Left, Prime Minister Antonis Samaras's New Democracy Party and its Socialist PASOK allies passed the 500-odd page bill shortly after midnight. They mustered 153 of parliament's 300 seats, with New Democracy and PASOK expelling seven deputies for not backing the measures.
There was also chaos inside the assembly, where parliamentary workers briefly stopped the session by walking out when they found their salaries would be cut.
The bill covering the bulk of €13.5 billion ($17.2 billion) worth of belt-tightening measures is a precursor to the 2013 budget law, which the government is expected to pass on Sunday. If it does, it is expected to unlock a €31.5 billion aid tranche from the IMF and the EU that Greece needs to shore up its banks and pay off loans.
"We must now pass the budget and right after that work for the recovery of the economy," Samaras said after the vote.
Analysts said that if the government passes the budget on Sunday, euro zone finance ministers could agree at a meeting in Brussels on Monday to let Greece push back its fiscal targets by two years to 2016 and ease austerity's grip on growth.
That will allow the ECB to also take measures to give Athens some slack, and the debate can then turn to ways of easing the debt load, expected to peak at more than 190% of Greece's GDP.