An anti-austerity demonstration by more than 80,000 people in Athens degenerated into violence on Wednesday as hundreds of protesters clashed with riot police ahead of a crucial parliamentary vote on new spending cuts.
The vote is the toughest test yet for the country's fragile four month-old coalition government, which must pass the €13.5 billion (NZ$20.8b) package of measures to ensure Greece continues receiving vital bailout funds from its international creditors to avoid bankruptcy.
Hundreds of protesters hurled rocks and gasoline bombs at lines of riot police guarding Parliament, who responded with volleys of tear gas and stun grenades, and the first use of water cannon in Greece in years.
Some in the 80,000-strong demonstration ran for cover as running battles broke out with police on the second day of a 48-hour general strike. Clouds of tear gas rose from Syntagma Square.
Inside the Parliament building, lawmakers interrupted the debate as Parliament employees went on strike to protest cuts to their wages brought by Finance Minister Yannis Stournaras in an amendment to the austerity bill.
Stournaras later withdrew the amendment, and the tempestuous debate resumed after Parliament employees returned to work.
The austerity package is expected to scrape through when the vote is held later in the night. But any defections or abstentions could severely weaken the conservative-led coalition formed in June.
"This bill not only demonstrates that this country will honour its international commitments in return for the major amounts of assistance it has received, it is a commitment to proceed with major structural reforms," Stournaras said.
The government combined has 176 of Parliament's 300 seats, and needs a simple majority of those present to pass the bill. Without the Democratic Left, which has said it will vote against, Samaras' conservatives and the Socialists control 160 votes. However, there is still a threat of more dissenters.
Greece's next bailout loan instalment of €31.5b, out of a total of €240b, is already five months overdue. Without it, Prime Minister Antonis Samaras says, Greece will run out of money on November 16.
If Athens cannot raise sufficient funds otherwise, it will quickly find it impossible to pay its huge debts. As well as pushing the country out of the 17-country group that uses the euro, this could trigger a nightmare of bank runs, hyperinflation and currency depreciation that would vapourise savings and put many basic goods out of the reach of many Greeks.
"We must vote in favour of the measures," conservative New Democracy lawmaker Constantinos Tassoulas urged Parliament. "It is our duty."
The measures being debated are for for 2013-14 and include new deep pension cuts and tax hikes, a two-year increase in the retirement age to 67, and laws that will make it easier to fire and transfer civil servants who are currently guaranteed jobs for life. The country is suffering a deep recession set to enter a sixth year, and record high unemployment of 25 per cent.
"You are throwing people onto to the street, people who need a few more years till they get their pensions," said Panagiotis Lafazanis, parliamentary spokesman for the main opposition Syriza, or Radical Left, party. "What will happen to them. Will they starve? ... This is an illegal and unconstitutional law."
Opposition parties accused the government of trampling on Greece's constitution with the proposed cuts in pensions and benefits, and complained that the bill, several hundred pages long, was too complex to be debated in a single session.
Meanwhile, judges in the country's Supreme Court ruled that new cuts to their own pay contained in the draft bill were illegal.
Samaras' small Democratic Left coalition partner has said it will not back the measures, while a handful of lawmakers from the third coalition party, the Socialists, are expected to vote against the austerity package.
Socialist MP Theodora Tzakri verbally shredded the bill, but said she was forced to back it as Greece had no other way of raising the funds it needs.
"The recession has exceeded every limit, and not only is no light visible at the end but we are still at the beginning of the crisis," Tzakri said. "I will vote for the measures with a gun to my forehead."
Greece's main trade association warned that the new cutbacks would further reduce consumer and government spending, driving even more retailers out of business.
"To vote for the measures ... will deal the coup de grace to an exhausted and battered society," association head Vassilis Korkidis said.
While Samaras has been facing increasing pressure at home, other members of the 17-country eurozone have been doing what they can to ensure Greece stays in the currency group. Germany's Chancellor Angela Merkel, for example, has softened her previous tough stance - paving the way for a deal to let Greece take more time to meet loan conditions.
Even if Parliament approves the draft legislation, it is unlikely that Greece will receive the next bailout instalment in time for Samaras' November 16 deadline. The payment was expected to be approved at a meeting of European finance ministers on Monday November 12.
However, the ministers' vote hinges on a report by the so-called troika of austerity inspectors from the European Union, IMF and European Central bank, which may not be ready in time. Furthermore, some eurozone countries can only give the go-ahead after their own Parliaments have voted on it. Germany is not expected to do so before November 19.
As a result, the EU or ECB may have to step in with some interim financing.
The 48-hour general strike against the bill shut down the public administration, left hospitals functioning on emergency staff and closed schools and tax offices. All ferry and train schedules have been cancelled until Thursday, flights were disrupted by a four-hour air traffic controllers' strike and Athens was without public transport for most of the day.
The country's biggest union has also called for a demonstration on Sunday evening, when the 2013 state budget is due to be voted on.