After a dramatic parliamentary debate, Greek politicians have approved draconian austerity measures aimed at unlocking €120bn (£102bn) of emergency loans deemed crucial for the debt-stricken country to avoid insolvency.
As thousands of outraged Greeks protested outside the 300-seat parliament, 172 MPS voted in favour of the controversial legislation, which paves the way to Athens adopting the harshest programme of fiscal and structural adjustment since the end of the second world war.
The IMF and eurozone nations had demanded tough economic reforms in return for the money ahead of a looming deadline on Greece's debt repayment.
"The only way to avoid bankruptcy is to take the money from our European partners and the IMF and to do that we need to enforce these measures," the finance minister, George Papaconstantinou, said before the ballot.
But piling the pressure on the prime minister, George Papandreou, a day after the country was rocked by its worst street violence since the debt crisis erupted, the conservative main opposition party voted against the unpopular policies.
Highlighting the depths of the passions aroused by the measures, Papandreou expelled three deputies from his Socialist party group of MPs who abstained in the vote.
The opposition New Democracy leader, Antonis Samaras, followed suit when Dora Bakoyiannis, a leading party apparatchnik and former foreign minister broke ranks and voted in favour of the reforms, saying they were for the good of the country.
The bailout had become unavoidable after Athens, staggering under a €300bn debt, found itself locked out of capital markets because of prohibitively high borrowing costs. The country faces a looming 19 May deadline to for the repayment of €8.5bn in maturing debt.
But the unprecedented €30bn of austerity measures over the next three years, which include wage and pension cuts and a steep rise in VAT, have ignited a storm of protests, not least among public sector workers who will bear the brunt of the cutbacks. Fifty thousand protesters marched in Athens yesterday.
Greeks woke in sombre mood today, numbed by the deaths yesterday of three employees killed when a hooded protester threw a petrol bomb into a bank branch in central Athens. Thousands paid tribute to the dead workers and by mid-morning, barely 24 hours after the neoclassical building went up in flames, its gutted remains had been turned into a shrine, encased by candles and flowers.
The employees – a man and two women, one of whom was four months pregnant – were the first to lose their lives since the crisis hit the country six months ago.
With tensions running high in the wake of the violence – which also saw protesters try to storm the parliament – President Karolos Papoulias warned that the nation was "on the brink of the abyss".
"I have difficulty finding the words to express my distress and outrage," said the widely revered head of state. "Our country came to the brink of the abyss. It is our collective responsibility to ensure that we don't go over the edge."
Amid mounting concerns at the violence, the Foreign Office urged visiting Britons to stay away from protests and public demonstrations.
But as police rounded up suspects among the self-described "anti-establishment" youths widely blamed for the deaths, there were fears that the financial, and increasingly social, turmoil shaking Greece is unlikely to end soon. Entrenched resistance to the reforms has been reinforced by the European commission's publication of data showing that Greece's economy shrank by 4% this year.
Olli Rehn, the EU's economic and monetary affairs commissioner, acknowledged this week that the three-year austerity programme would deepen the contraction. Greeks had hoped their dire public finances would begin to recover next year.
The opposition New Democracy party's refusal to endorse the cuts – saying they will only exacerbate the country's recession – will make it harder for Papandreou to win public approval. Analysts say it will also open the way for further opposition from trade unions, already pledging more street protests and strikes.
"Washington [where the IMF is based] and the EU want to see a plurality of serious Greek politicians supporting the measures," said one well-placed insider. "As a member of the former government that helped get Greece in this mess, Samaras has a duty to support the measures. Failure to do so will show him as the opportunist that he is."