Greece approves controversial austerity bill

Parliament narrowly passed the governing coalition's latest budget proposal, which includes more belt-tightening and economic reforms.

The 153 lawmakers of the ruling Syriza/Independent Greeks government coalition all voted for the bill. All opposition members in the 300 seat parliament opposed the bill.

The vote came on a day that police clashed with angry demonstrators on the streets of Athens - the latest in a series of ongoing protests and crippling general strikes that have beset the country.

Many Greeks oppose the austerity measures that amount to $6.2 billion (5.4 billion euros). The law will increase social security and pension contributions and raise taxes for most people.

The European Union and international creditors are demanding the tough measures in exchange for an 86 billion-euro ($95 billion) bailout agreed to last July. It is the third such bailout for debt-laden Greece since 2010.

IMF wants debt relief

But the Mediterranean country has struggled to pay back its loans, prompting the IMF and some European politicians to call for debt relief for Greece. The IMF warns that the mammoth debt payments currently made by Greece are unsustainable over the long term.

Growth forecasts published by the European Commission last week estimated that Greece's public debt will rise to 182.8 percent of GDP this year - a record within the eurozone.

The parliamentary vote came just hours before an emergency meeting of eurozone finance ministers in Brussels. The ministers from the 19 countries that use the euro - the Eurogroup - are expected to discuss debt relief for Greece , which the IMF is demanding as a condition for a new agreement.

Now that the bill has been passed, Greek Prime Minister Alexis Tsipras hopes the eurozone finance ministers will move on from approving the reforms to a discussion on debt relief for the country.

Tsipras defends the bill

The reforms will cut the country's highest pension payouts, merge several pension funds, increase contributions and hike taxes on medium and high incomes.

The pension cuts are expected to save 1.8 billion euros, while the tax reforms are to bring in another 1.8 billion. The parliament will decide later on raising indirect taxes to collect the same sum again.

Before the vote Tsipras defended the measures, saying they would spare the poorest, and also prevent the pension system collapsing in a few years.

"The system requires root and branch reform that previous governments have not dared to undertake," he told lawmakers, adding that the reforms would not affect the poor, something that was the result of "long and hard negotiations with creditors."

bik/bw (AFP, AP, dpa)