The Greek prime minister survived a crucial confidence vote early today, keeping alive a government dedicated to averting a debt default that could spark a financial maelstrom around the world.
Lawmakers voted, 155-143, along party lines to back George Papandreou, who now faces a critical vote next week on a massive austerity package that Greece's international creditors have said must pass by the end of June.
He is seeking $28 billion euros in budget cuts and new taxes and 50 billion euros worth of privatization of public assets. Unless the new measures pass, Greece will not receive the next batch of bailout funds, worth 12 billion euros, and will face a disastrous default in July, when it runs out of money.
A default by Greece could drag down Greek and European banks and renew fears over the finances of other eurozone countries such as Portugal, Ireland and Spain.
Papandreou must still persuade all lawmakers of his Socialist party to support the austerity bill, which has provoked strikes, riots and a slump in his popularity.
While all 155 Socialists voted in favor in the confidence motion, several have publicly criticized the austerity measures, and at least one has said he will not back them.
After the vote, riot police fired tear gas and stun grenades to push back a group of about 200 protesters who had broken off from a main rally of several thousand to throw bottles and other objects at the police lines guarding Parliament.
"We will do everything in our power to end the state of insecurity facing Greek families and exit this crisis in a safe way. We have a plan, we have prospects," Papandreou said during a debate before his victory. "Regardless of the panic caused by some, we are on an organized course, helped by the international community with massive loans -- the largest every given in the history of our planet."
Papandreou's government came to the brink of collapse last week as protesters rioted on the streets of Athens, two party rebels resigned their parliamentary seats, and talks with the opposition conservatives over forming a pro-austerity coalition government fell apart.
In response, he reshuffled his Cabinet, replaced his increasingly unpopular finance minister with a party heavyweight -- his main internal rival -- and called for the confidence vote.