Greece’s cabinet has approved fresh austerity measures demanded by the eurozone and IMF in return for a 130bn-euro ($170bn; £110bn) bailout.The draft bill must now be passed by the Greek parliament and approved by European finance ministers.
Five ministers have resigned from the government over the issue, with one junior party in the coalition saying the demands were “humiliating”.
Unions began a 48-hour strike on Friday with protesters clashing with police.
Prime Minister Lucas Papademos has warned the country faces “uncontrolled economic chaos” if it fails to agree spending cuts and defaults on its debts.
“We cannot allow Greece to go bankrupt,” he told his cabinet, saying it was an “hour of historic responsibility”.
“A disorderly default would plunge our country in a disastrous adventure,” he said.
Ministers who disagreed with austerity measures could not stay in the coalition government, the Greek leader added.
Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far.
Her Pasok party, the largest in the coalition, also suffered the loss of a deputy labour minister on Thursday.
The cuts package will be put to the vote in parliament on Sunday, with some MPs from the governing parties expected to vote against, the BBC’s Mark Lowen in Athens reports.
But analysts say the package should still have enough support in parliament, because Pasok and its other coalition ally New Democracy account for more than 230 deputies out of a total of 300.
The austerity cuts include:
- 15,000 public-sector job cuts
- liberalisation of labour laws
- lowering the minimum wage by 20% from 751 euros a month to 600 euros
- negotiating a debt write-off with banks.
These were presented to a eurozone ministers in Brussels on Thursday evening..
The country is already reeling from the effects of an earlier round of austerity that followed a previous bailout – it is deep in recession, with unemployment rising above 20%.