The World

By Kerin Hope and Ralph Atkins in Athens, and Esther Bintliff in London

18.45pm (Athens time): We’re wrapping up the live blog here. Here’s a quick recap of events today:

• Greece’s 300-member parliament approved the austerity bill by 155 votes to 138 votes
• Protests continued throughout the day, with police firing tear gas and demonstrators hurling stones and other debris, as well as setting fire to rubbish bins. As evening fell in Athens, demonstrations began spreading beyond Syntagma square.
• 26 police and 15 protesters have been injured and transferred to hospitals, according to AP
• Angela Merkel, German chancellor, said the austerity package was “a really good piece of news”
• José Manuel Barroso, president of the European Commission, and Herman Van Rompuy, president of the European Council, praised the Greek decision – but also reminded everyone that there is another vote tomorrow
• Markets, which had risen on Wednesday morning in anticipation of the vote, came off their highs once the “Yes” vote was confirmed – providing a lesson in an old saying that it’s ‘better to travel with hope than arrive’. Wall Street was looking at another session of healthy gains, with the S&P 500 lifted by the Athens news

Thankyou all for reading, and for more Greece coverage, go to www.ft.com/greece

18.15pm (Athens time):

Riot police clash with protesters at Syntagma Square in front of the Greek Parliament in central Athens, AP.

Protests are now spreading beyond Syntagma square.

Demostrators are ripping out traffic bollards and using them to smash paving stones – to use as ammunition.

Riot police, dressed in full protective gear, are spreading out along Athens’ streets.

According to AP, the authorities and emergency services said 26 police and 15 protesters were injured and transferred to hospitals, while 29 people were detained, and nine arrested.

18.10pm (Athens time):  

An update on the response in Germany, from our Berlin bureau chief:

Quentin Peel: Angela Merkel, German chancellor, was in the middle of speaking at a meeting in the Bundestag when she got a text message on her mobile phone, informing her that the Greek parliament had backed the austerity package.  “That is a really good piece of news today,” she said, as she read out the message to an audience of bankers and parliamentarians, looking both relieved and delighted.

Earlier she had urged the leaders of Germany’s financial institutions to contribute voluntarily to the new Greek rescue package – out of self-interest, not a sense of responsibility. If they wanted to carry on doing business in stable countries, they should willingly share the cost with the taxpayer.

18.00pm (Athens time):

Are Greece’s problems just beginning? Over on The A-List, Ian Bremmer, president of Eurasia Group, a political risk consultancy, and author of ‘The End of the Free Market’, argues that today’s victory for Papandreou will be short-lived. Read his thoughtful take here.

17.48pm (Athens time):  

Wall Street has been lifted by the Greek news in morning trade, with the S&P 500 up 0.4 per cent at 1,302, pulling the measures back over the psychologically significant 1,300 mark, reports Michael Stothard in New York.

17.35pm (Athens time):

Commerzbank’s chief executive Martin Blessing has said his bank is willing to contribute to a Greek aid package,  in order to win time for Greece, help it grow and stay competitive and prevent a “chain-reaction”, reports Bloomberg. German financial institutions have reached a draft agreement on participation in a Greek aid package, Blessing said at a conference in Berlin today, but he added there were still “a few hitches” in terms of reaching a deal.

17.25pm (Athens time):

Megan Murphy, the FT’s investment banking correspondent, reports from Athens:

The mood in the city centre immediately after the vote is much more tense than yesterday… burning piles of rubbish on most streets, blocks of smashed marble, riot police mobilising. Some streets are partially barricaded with trash cans, overturned benches, etc. Tear gas canisters continue to be fired — no panic or widespread violence, but a very tense atmosphere.

17.20pm (Athens time):

A protester is treated following clashes with the police REUTERS/John Kolesidis

The vote may be over – but Syntagma square has become a battleground. It is impossible to get close to the Parliament building without being overcome by the tear gas.

Riot police continue to take aim at protesters, and much of the rubbish strewn across the square is on fire. The atmosphere is not cooling.

17.10pm (Athens time):

Our Brussels bureau chief, Peter Spiegel, reports that the European Union’s two presidents just released a joint statement praising the Greek decision – but also reminding everyone that there is another vote tomorrow that would allow Athens to fast-track the reform measures.

José Manuel Barroso, president of the European Commission, and Herman Van Rompuy, president of the European Council – the EU’s executive branch and heads of government, respectively – made clear that this second vote needs to pass before the EU will commit to paying out the crucial €12bn in aid that Greece needs to avoid default.

Their statement also notes that the second positive vote would bring an EU commitment to a second bail-out of Greece, which is likely to total an estimated €120bn – on top of the €57bn still coming in the current bail-out. Here’s the statement, in full:

With today’s approval by the Greek Parliament of the revised economic programme, the country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform. But it has also taken a vital step back – from the very grave scenario of default. This was a vote of national responsibility.

Tomorrow, the eyes of Europe will again be turned towards Athens as parliamentarians are called upon to approve the implementing measures for the programme. A second positive vote would pave the way for the disbursement of the next tranche of financial assistance. It would also allow for work to proceed rapidly on a second package of financial assistance, enabling the country to move forward and restoring hope to the Greek people.

16.56pm (Athens time):

We’ve had some pictures of protesters and police, so here’s one of the politicians:

Greek Prime Minister George Papandreou (Front-L) and Pasok party parliamentarians applaud after winning the austerity vote. EPA/KATERINA MAVRONA

16.54pm (Athens time):

The president of Germany’s Bundesbank, Jens Weidmann, has applauded Greece’s success in passing the austerity bill, but said more work needs to be done to overcome the European debt crisis, reports Bloomberg.

“This is an important step, but it’s only part of a process,” Weidmann told reporters today in Berlin.

16.48pm (Athens time):

The crisis in Greece has had repercussions across Europe. Here’s our Warsaw and Prague correspondent on the response in Poland:

Jan Cienski: The Greek parliament’s decision to undertake economic reform is being greeted with relief by more than 700,000 Polish mortgage holders whose loans are denominated in Swiss francs. Such loans were very popular before the economic crisis because the interest on them is lower than for loans denominated in zlotys, but in recent weeks the value of the franc has soared against the zloty, a sign of the Swiss currency’s safe haven status.

Immediately after the Greek vote, the zloty gained about half a percentage point against the franc, and is now trading at about 3.33 to the franc. That is still much higher than when more forex mortgages were taken out, but a drop from recent highs.

16.44pm (Athens time):

Tullia Bucco, economist at UniCredit in Milan, says Greece has passed a critical test, but notes that Thursday will bring another key vote:

Greece faces another test tomorrow, when Parliament will hold on an article-by-article vote on the legislation implementing the austerity plan, including privatizations. However, the MPs that backed the medium-term austerity package are likely to vote in favor also of the implementation bill.

16.40pm (Athens time):

Here are some more details from Athens on the expulsion of Panayotis Kouroublis:

Less than two minutes after the result of the vote was announced, the speaker announced that Mr Kouroublis, the only Pasok deputy who finally rebelled, had been expelled from the party. His departure leaves the socialists with 154 seats, further reducing their majority ahead of another roll-call vote on Thursday, this time on an enabling law that will allow structural reforms to go ahead without having to be approved one at a time by parliament.

Socialist deputies looked relieved as they left the chamber for a late lunch. But some are due back in less than 90 minutes for the start of the debate on the enabling law. Unlike the earlier vote, it can be held within 24 hours under emergency parliamentary procedures.

16.30pm (Athens time):

Here’s a timely update from our global markets commentator:

Jamie Chisholm: Markets have provided a lesson in an old saying that it’s ‘better to travel with hope than arrive’. Though still up on the session, stocks, the euro and some commodities have come off their highs once the “yes” vote was confirmed. The FTSE Eurofirst 300 is up 1.5 per cent; the euro, which was higher by 0.6 per cent is now up 0.2 per cent at $1.4397. Eurozone “peripheral” bond spreads are not especially enamoured of the outcome, remaining at elevated levels as the credit markets take a less panglossian view of events than their more flighty equity cousins.

16.25pm (Athens time):

Panagiotis Kouroublis, the rebel Pasok deputy who voted against the austerity package, has been expelled from the party.

16.20pm (Athens time):

Some more details on the passing of the bill:

• Greece’s 300-member parliament approved it by 155 votes to 138 votes
• There were 5 abstentions
• Two deputies were absent
• Panayotis Kouroublis, one of Pasok’s 155 deputies, voted against the package, while Elsa Papademetriou, a conservative, voted in favour.

Wild cheering broke out in the chamber, and Pasok deputies embraced each other as the result was announced by speaker Philippos Petsalnikos.

16.05pm (Athens time):

The Greek Parliament has voted in favour of the austerity bill.

Voting is still ongoing, but Prime Minister Papandreou’s Socialist government has already reached the 151 votes it needs in the 300-seat chamber to secure the passage of the bill.

15.57pm (Athens time):

A Greek Socialist deputy who had vowed to vote against the austerity bill has voted in favour, says AP. A Greek journalist tweets:

MP Athanasiadis votes FOR the midterm plan after days of saying he would vote against it. Home and dry it seems. #Greece

15.55pm (Athens time):

A Greek Socialist deputy has voted against the austerity law, reports Reuters.

Panagiotis Kouroublis was one of the three socialist lawmakers who had said they were opposed to the plan. Mr Kouroublis said:

This is my patriotic and social duty to the country and the people. Patriotism, in my opinion, goes against social injustice created by the burden of the crisis, that is unevenly shared.

15.45pm (Athens time):

And they’re off – voting has finally begun.

15.40pm (Athens time):

Outside the parliament building, protestors have been clashing with riot police. A Channel 4 News cameraman, Jason Farrington, just tweeted:

Been massively teargassed – police fired it outside parliament #greece. End result of gas – dry-retching, streaming eyes, burning skin.

15.35pm (Athens time):

Our colleagues on the Lex column have just published a note on European banks and Greece: read it in full here. A sneak peek:

The Society for the Self-Preservation of Europe’s Banks is open for business. New members welcome. As Greek MPs head towards a knife-edge vote in parliament on Wednesday on a €28bn austerity and revenue-raising package, French banks have devised a plan to keep lending to Greece by rolling over maturing debt. The proposal will help Greece only at the margin since it does nothing to reduce the total value of the country’s debts. But it looks like good news for beleaguered European bank investors…

15.30pm (Athens time):

In parliament, wrapping up the debate for the socialists, George Papandreou, the prime minister, has taken a swipe at Greece’s European partners for being fractious and inward-looking as Athens struggled to cope with its debt crisis. However Mr Papandreou then changed tack, sounding grateful that the European Union and the International Monetary Fund were prepared to bail out the country for the second time in 13 months. He pointed out that the EU and the IMF “have already given us a vote of confidence by coming up with financial support.”

“But they’re investing in a new Greece, not the old one – one that we, too, have to believe in”, he said.

15.25pm (Athens time):

The UK wouldn’t be insulated from a Greek financial collapse, says Vince Cable, British business secretary. Mr Cable told Sky News:

Britain is not (a member) of the eurozone and so we are not giving a running commentary on what they should do and on how they use their financing mechanisms. But clearly we are not insulated. If there were a disorderly collapse in Greece it would affect us directly through trade and indirectly through the banking system, so it is important that this problem is resolved and the combination of measures that’s put in place will give Greece time to deal with this very, very difficult problem that they have.

15.15pm (Athens time):

Here’s a quick recap of events so far.

• The vote in Parliament is running late. George Papandreou, the prime minister, has just started speaking; he will most likely be followed by the opposition leader.
• Markets are buoyant – with the euro at a 2-week high – as investors price in the likelihood that the austerity package will be passed and Greece will receive its next tranche of bail-out funds
• Protestors have clashed with riot police, who fired tear gas

15.00pm (Athens time):

Protestors clash with police, who fired tear gas early on Wednesday

The vote is now running an hour late due to the ongoing debate in parliament, where the finance minister, Evangelos Venizelos, is now speaking.

Mr Venizelos is staking his political future on getting the package through parliament. He stepped up to the plate 45 minutes after the original deadline for the vote. If the package isn’t adopted, Greece faces a grim future, he warned:

Recession will deepen, unemployment will rise, liquidity will dry up, exports won’t get credit, and porperty prices will collapse. We don’t have another choice… We have to stay in the euro. We want the security of knowing where we’re going.

14.55pm (Athens time):

A clarification: even if the vote passes thanks to the support of Ms Papadimitriou and other mavericks, the government will still have to resign if it doesn’t get 151 out of the 155 Pasok (Panhellenic Socialist Movement) votes. Last week, all 155 Pasok deputies stayed loyal at the vote of confidence in George Papandreou’s new cabinet. Anything less today would be bad news for political stability.

14.35pm (Athens time):

Here’s the latest from our global markets commentator:

Jamie Chisholm: Markets are continuing to behave as if the austerity package will pass parliament (likely) and will solve Greece’s and thus the eurozone’s fiscal problems (unlikely). Traders have gone risk ballistic, pushing the FTSE Eurofirst 300 up 1.6 per cent, forcing the euro up to a two-week high of $1.4440, up 0.5 per cent, and nudging “peripheral” spreads marginally lower.

14.32pm (Athens time):

Hopes that the vote will pass have been boosted after Elsa Papadimitriou, a popular opposition politician with the conservative New Democracy party, said she would vote in favour.

Every extra vote comes in useful for the socialist PASOK party, but Ms Papademetriou’s wouldn’t make up for a socialist defection – she’s already considered an honorary “Pasoktzina” in some circles because she’s known the prime minister’s family since his childhood. And she was as critical as any conservative on the government’s record:

The (first) package had no bold or creative elements in it.

But co-operation and consensus is what we need for the country to move forward…So I can’t just abstain.

14.20pm (Athens time):

Riot police face demonstrators in front of the parliament in Athens. REUTERS/John Kolesidis

The vote has been delayed – it should have started at 14.00 Athens time, but the two main party leaders are yet to speak.

Moving further into overtime, Alexis Tsipras, the militant leader of Syriza, a small leftwing party, complained about the timing of the vote.

“It shouldn’t be happening while some Greek citizens are under attack,” he said in a reference to scuffles between police and demonstrators in Syntagma square outside parliament.

There’s an air of anticipation among the protestors as the vote approaches, though some have been moving away to avoid teargas fumes blowing across the square.

Riot police are lined up beside a crowd barrier placed across a main boulevard, backed up by parked dark blue police buses, so that deputies can drive away after the vote without having to confront the protestors.

14.10pm (Athens time):

FT Alphaville has got hold of some nice charts from UBS that show who is holding Greek debt now – and who might hold Greek debt in a year’s time.

14.04pm (Athens time):

Back in parliament, the 2pm deadline for voting has come and gone – yet Ms Papariga, leader of the Greek communist party, was still in full flow.

“Sit down,” deputies shouted; “Please, Please,” implored the speaker, ringing a bell.

The roll-call vote was expected to take around 40 minutes, with deputies being called by name according to their constituencies around Greece.

Confusingly for a native English-speaker trying to follow the count, a response of “Nai” means an affirmative (“Yes” in Greek), while a shout that sounds like “Okay” is actually “Ochi” -meaning no.

13.59pm (Athens time):

Gideon Rachman reports from Brussels: George Soros was seen heading to a meeting at the European Commission here in Brussels last night. One might suspect that he was going to give the commissioners his thoughts on the currency crisis – which is kind of his special subject. But no, apparently he is in town to lobby for more aid for the Roma – whose cause he has long championed.

Meanwhile Olli Rehn, the monetary affairs commissioner, insists there is no Plan B for Greece. This may even be true. Commission officials say that they cannot start proper scenario-planning for a Greek default – for fear that it will leak and panic the markets.

13.55pm (Athens time):

In parliament, Aleka Papariga, the leader of Greece’s still-Stalinist communist party, sounded an unexpectedly down-to-earth note as the debate was drawing to a close.

“We’re being blackmailed again (to vote for new austerity measures)…The government doesn’t know what’s going on, it just doesn’t understand.”

As mutters from the socialist benches grew louder, Ms Papariga raised her voice:

“Greece is bankrupt.. The government calls it a crisis but that’s the fact. We’re bankrupt. The process hasn’t yet been completed but it’s on the way… it may be disorderly or not, but it doesn’t depend on this vote. It’s going to happen.”

13.46pm (Athens time):

Syntagma Square is continuing to fill up. The FT has spotted “Goodbye GAP” spray painted onto the walls of a building next to the parliament – a reference to prime minister George Andreas Papandreou.

13.43pm (Athens time):

Today’s vote in parliament is at the forefront of everyone’s mind. But what happens afterwards? Currency analysts at Brown Brothers Harriman & Co, led by Marc Chandler, warn that a Yes vote doesn’t mean the crisis is over:

Markets have all but priced in the passing of the austerity measures by Greece and now await confirmation at 2pm Athens time. In addition, German banks have signalled they would accept the French plan as a blueprint for their debt rollover negotiations. But this is certainly not the end of the story, which could turn out to be a classic case of buy the rumor and sell the fact. To start, it is unclear how ratings agencies will react. Fitch already came out saying that the plan will likely constitute a default and there has been no firm statement from the other agencies. In addition, since the French proposal would not cover all of Greek debt that is held by commercial banks, the plan would need to get much wider support. And if all these hurdles are solved, we still have to deal with an insolvent Greece.

13.35pm (Athens time):

Protesters burn dustbins used as barricades during a 48-hour general strike in Athens. LOUISA GOULIAMAKI/AFP/Getty Images

Greek journalist Matina Stevis has tweeted: “Kicking off in Syntagma square, teargas, hand grenades and some protesters retaliate by throwing stones v v volatile”

13.30pm (Athens time):

What’s the mood like in other European capitals? Here’s our Brussels bureau chief:

Peter Spiegel: After several furious weeks of debate and negotiations in Brussels, the capital of Europe is unusually quiet ahead of the Greek vote, either out of a collective holding of breath, or confidence that the Greek parliament will pass the austerity measues.

Amadeu Altafaj-Tardio, the European commission’s chief economic spokesman, even showed up at the daily midday press briefing without a tie, a rarity for the dapper Spaniard.

Was that a sign of the mood in the Berlaymont, the commission’s headquarters? “We are confident,” said Altafaj-Tardio with a chuckle.

13.15pm (Athens time):

For a sense of things on the ground in Athens, here’s Ralph Atkins, our eurozone economics correspondent, reporting from the Greek capital.

12.50pm (Athens time):

Greek police have clashed with protesters again this morning,  as demonstrators tried to block the way into parliament. Three people are being treated for minor injuries as a result of the clashes, and one communist deputy was pelted with yoghurt as she made her way into the building, according to Reuters.

Riot police disperse protestors in central Athens

12.25pm (Athens time):

In the markets, investors are pricing in the assumption that the Greek parliament will pass the package of austerity measures, reports Jamie Chisholm, our global markets commentator. The FTSE All-World equity index, up 0.7 per cent, has rebounded 2.2 per cent this week on hopes that Athens will accept the European Union and International Monetary Fund’s loan conditions, cutting the chances of a Greek default.

12.15pm (Athens time):

Here’s a quick recap of what’s happened today so far.

• Riot police have been out in the early hours on the streets of Athens
• Today’s session has begun in parliament, 30 minutes late
• Parliamentary staff insist the vote will happen at 2pm, although it’s already been moved back from 12 midday

11.40am (Athens time):

Germany’s Die Zeit newspaper has just released an interview with Jürgen Stark, the ECB executive board member, who criticises the idea of helping Greece with aid from the European Union’s structural funds.

Greece’s problem is not a lack of infrastructure but over-indebtedness and lost competitiveness, he huffs. “This proposal is absolutely counter productive. It suggests to the Greek government that the crisis can be solved with financial transfers. This is economic nonsense and not politically wise because it undermines incentives to reform and consolidate.”

11.35am (Athens time):

The five dissident deputies in the PanHellenic Socialist Movement are a disparate group.

Sifis Valirakis, a veteran hardline socialist from Crete, is seen as very unlikely to bend to the party’s will.

So is Alekos Athanasiades who represents a northern Greek constituency where the biggest employer is the state electricity utility  – its 21,000  workers are on strike this week to protest against the company’s planned privatisation, if the package goes through..

Thomas Robopoulos, a successful businessman from the northern city of Thessaloniki told Skai television on Tuesday he would “make up his mind at the last minute”.

The word among Pasok party officials on Wednesday morning was that the other two – Panayotis Kouroumblis and Chrysa Arapoglou – may be having second thoughts.

As Mr Venizelos, the finance minister, spelled out, the consequences of voting against the medium-term package would be immediate expulsion from Pasok and an uncertain future in the twilight zone of the independent benches.

11.30am (Athens time):

The first marches by strikers through Syntagma square have started. The protests are noisy – but the riot police are keeping a low profile in side streets and there is no sign yet of violence erupting. But this was the pattern yesterday – first came the formal demonstrations, then the extremists moved in and started fires – followed quickly by the riot police.

The luxury Grande Bretagne hotel on the square, with its view across to the Greek parliament, has kept its shutters closed. Some have been spray painted with slogans.

11.20am (Athens time):

Staff in the office of Philippos Petsalnikos, the speaker, insist the vote will happen on schedule at 2pm, although it’s already been moved back from 12 noon.

Nobody’s quite sure just how many deputies still want to have their say, as the only list is sitting on the speaker’s desk in the chamber.

But if the timetable looks like slipping again, deputies’ speaking time will pared back to just a  few minutes, one staffer said.

10.55am (Athens time):

Dora Bakoyannis, a former foreign minister and leader of the conservative splinter group Democratic Alliance, has blasted the socialist government for not delivering on reform over the past year.

A statuesque figure among the blue-suited conservatives, Ms Bakoyannis said that ”the government couldn’t or didn’t want to make structural reform happen”.

“What did we see? A socialist parliamentary group that didn’t want to follow the policies laid out by the prime minister. They went public with their doubts about the (first) austerity plan and its targets,” she said.

Many socialist deputies would agree  – though perhaps not with her claim that Greece’s creditors “have completely lost trust in us”.

Ms Bakoyannis was expelled from New Democracy, the main conservative opposition party, because she voted in favour of  Greece’s first bail-out by the European Union and International Monetary Fund a year ago.

This time she’s agreed that she and her handful of deputies will vote “according to conscience”.

10.15am (Athens time):

At 10.00 am  – 30 minutes late – the session opened with a conservative backbencher taking the podium to address a nearly empty chamber.

Parliament had another late night on Tuesday with debate continuing into the early hours, according to a staffer in the speaker’s  office.

Antonis Samaras, the conservative opposition leader who has resisted appeals for consensus on the austerity plan from, among others, Olli Rehn and Angela Merkel, has stuck to his guns. “If we pass the plan, it will bring bankruptcy even closer,” he warned in his speech on Tuesday night.

But two conservative deputies have threatened to break ranks and back the measures if the vote looks like being close.

10.00am (Athens time)

Greece’s day of fate has started – and we’ll be bringing you regular updates throughout what is expected to be a dramatic day both in parliament and on the streets.  It is a beautiful sunny day with a gentle breeze and the parliamentary television channel is playing Beethoven.

The debate on the revised austerity measures is expected to start within the next hour – but the socialist party of George Papandreou, prime minister, is notorious for its late time keeping.

The riot police were out in force until the early hours of this morning in Athens’ main Syntagma square, scene of yesterday’s violent demonstrations.

A protester throws a stone at riot police in central Athens

This morning, the stench of tear gas has largely gone and some attempts are being made to clear the streets of the mountains of smouldering rubbish set ablaze by protesters.

But the country is still paralysed by a two-day general strike and fresh demonstrations are expected later today.

The focus in the Greek newspapers is on whether five socialist dissident parliamentary deputies will vote against the bill – threatening Mr Papadreaou’s majority The prime minister and Evangelos Venizelos have appealed for them to “do their patriotic duty and vote for the programme,” reports leftwing daily Eleftherotypia.

In the past two days Mr Venizelos has talked to all five in person – and telephoned all the other socialist deputies to make sure they’re on board. It’s not yet clear whether the arm twisting has succeeded.

Further reading and viewing:

FT video – Ralph Atkins in Athens on the first day of the general strike

FT Slideshow – Mass demonstrations in Greece