Greek lawmakers approved the government's 30 billion euro ($40 billion) austerity bill in a vote in parliament on Thursday, paving the way for a record bailout from the European Union and International Monetary Fund.
As the vote took place, a crowd of thousands of protesting students, workers and pensioners gathered outside parliament to voice their opposition to the bill, chanting Take to the streets! Say 'No' to the measures!
Riot police fired tear gas to disperse about 150 protesters who hurled bottles and stones. The demonstrators set garbage cans on fire as they withdrew.
On Wednesday, in the biggest and most violent protest since riots shook the country in 2008, some 50,000 Greeks marched in Athens and clashed with police in pitched street battles. A petrol bomb attack killed three workers in a local bank branch.
Speaking to the house before the vote, Prime Minister George Papandreou said there was no time to lose in reforming Greece's broken economy, whose debt and deficit problems have triggered a wider crisis threatening the entire 16-nation euro zone.
The emergency measures are the condition for us to regain our credibility and win time, lost time. The time to make the big changes that were delayed for years, he said.
In a sign of the problems Papandreou faces within his Socialists in applying the harsh measures, three members refused to support the bill, prompting him to immediately expel them from his parliamentary team.
The legislation, which includes tax hikes, pension reforms and deep cuts in public sector bonuses which will slash take-home pay for a fifth of the workforce, is being pushed through in exchange for aid of 110 billion euros -- the first rescue of a member of the common currency bloc.
MORE PROTESTS PLANNED
Greece's main public and private sector unions, whose strikes on Wednesday grounded flights, shut shops and brought public transport to a standstill, have vowed to continue to fight the government's plans.
People are right to react and they should continue to protest because these measures are unfair, said Pinelopi Darmi, a 20-year-old university student. They hurt the poor only and let those responsible for the crisis get away with it.
Athenians flocked to the site of the Marfin bank branch on Stadiou Avenue in central Athens, laying flowers at the entrance of the burned-out building where three employees choked to death on smoke at the height of the Wednesday march.
More than 50 people were hurt in the clashes and 25 have been arrested for attacking police and damaging shops.
In a nod to protestors' demands that corrupt politicians blamed for the crisis be punished, Papandreou promised action to crack down on graft.
Since coming to power in October, his government has talked often about justice and transparency, but no politicians have been prosecuted yet and the public is losing patience.
We will send and we must send cases (of corruption) to the prosecutor, he said. This is what Greek people demand. - For more on the Greek crisis click on
(Additional reporting by Dina Kyriakidou; writing by Noah Barkin; editing by Jon Boyle)