Greece's Parliament has approved an austerity bill demanded by bailout creditors, despite a significant level of dissent from the governing leftist Syriza party.
The bill to impose sweeping tax hikes and spending cuts was approved with the support of three pro-European opposition parties.
Several prominent members of Prime Minister Alexis Tsipras' ruling party voted against his recommendation, including Energy Minister Panagiotis Lafazanis and former finance minister Yanis Varoufakis.
Eurozone rescue lenders demanded the fresh round of cuts in a deal reached this week to place Greece in a new bailout program.
Dissenters argued that Greeks could not face any more cuts after six years of recession that saw a sharp rise in poverty and unemployment.
Former Greek Finance Minister Yanis Varoufakis has voted against the government in a critical austerity bill vote.
Varoufakis, who was replaced earlier this month, led negotiations with bailout creditors for months after Greece's left-wing was formed in late January.
But he has recently criticized Prime Minister Alexis Tsipras over a draft agreement reached this week for a massive new international rescue deal.
Greek Prime Minister Alexis Tsipras said he had no choice but to accept tough terms with creditors, ahead of a critical vote on a new austerity package and bailout deal.
"We had a very specific choice: A deal we largely disagreed with, or a chaotic default," he told parliament.
Tsipras received a standing ovation from his party but is facing a revolt in his own party against the bill, and is likely to rely on opposition backing to pass it.
Party members, including members of his own Cabinet, have vowed to oppose the deal.
Police say about 50 protesters have been detained during hour-long clashes outside Parliament.
The violence involved about 200 youths who hurled firebombs and rocks at riot police, and smashed office windows and set fire to trash bins.
Many of the mask-wearing protesters carried wooden bats and pieces of smashed paving stones, in the worst clashes seen since Prime Minister Alexis Tsipras' left-wing government was formed six months ago.
The clashes died down as a debate got underway in parliament on a new austerity bill.
Earlier, more than 10,000 people, supporters of left-wing groups and a Communist-backed trade union, staged a peaceful rally in central Athens.
Germany says the idea that basic human rights in Greece might suffer because of austerity imposed by the country's creditors is "fanciful."
Juan Pablo Bohoslavsky, an independent U.N. expert on foreign debt, says Greece's creditors may break international law if the conditions they impose on Athens lead to undue hardship.
Greece has seen drastic cuts to public services and a rise in unemployment and homelessness because of austerity measures introduced in recent years.
German Finance Ministry spokesman Martin Jaeger said Wednesday that he couldn't see evidence of human rights being ignored by Berlin.
Jaeger declined to say whether German officials had made or are making any attempt to ensure the demands on Greece are compatible with human rights law.
Clashes have broken out at an anti-austerity rally by thousands of protesters outside Parliament in Athens.
Riot police used pepper spray and tear gas Wednesday night to fight back youths in the crowd who were hurling Molotov cocktails and rocks at police.
Police said about 12,500 people were at the rally at Syntagma Square. The clashes broke out just as lawmakers were starting to debate an austerity bill that includes consumer tax increases and pension reforms.
Prime Minister Alexis Tsipras, who has faced strident opposition to the bill from his own radical left Syriza party, says it's the best possible deal he could get to prevent Greece from being forced out of Europe's joint euro currency.
Thousands of anti-austerity demonstrators are marching through Athens for a rally outside of Parliament ahead of a debate and vote on a new austerity bill that Greece must pass before it can start negotiations with creditors on a third bailout.
Lawmakers are to vote on the tax increases and pension reforms — but the vote could be held after midnight Wednesday.
Prime Minister Alexis Tsipras is facing strident opposition to the bill from his own radical left Syriza party, where members are furious at his backtracking on party promises to repeal austerity. Tsipras has insisted this was the best possible deal to prevent Greece from being forced out of Europe's joint euro currency.
Greece's parliament speaker has called a meeting that is delaying a Parliament debate on austerity cuts demanded by creditors.
Parliament Speaker Zoe Konstantopoulou has called a chairmen's conference — a meeting of the speaker, her deputies and committee chairmen — pushing back the expected start of Wednesday night's austerity debate for more than twohours. Konstantopoulouhadearlier urged lawmakers to try to obstruct or block the vote, describing it as the result of "blackmail" by international lenders.
Prime Minister Alexis Tsipras isbeing openly defied by dissenters in his governing Syriza party who are urging him not to sign up for a third bailout.
French legislators have approved the bailout deal meant to prevent Greece's economy from collapsing.
Speaking before the vote Wednesday in France's National Assembly, Prime Minister Manuel Valls said the 85-billion-euro ($94 billion) bailout "is vital to give Greece the breathing room it needs to imagine a future that's not only about paying back its debt."
Valls said the eurozone is considering measures to help Greece, including lengthening the payback period on its debt or lowering the interest rate.
The German government is arguing that one possible way to help Greece meet its financial obligations in coming days, before a full bailout program is established, is for the country to issue IOUs for domestic needs.
Finance Ministry spokesman Martin Jaeger said Wednesday that "we have included this element in the discussion" among eurozone nations on how to keep Greece afloat while talks proceed on the details of a full bailout deal. The talks are expected to last weeks.
Jaeger says that IOUs are just one of "various conceivable approaches."
Greece needs short-term financing among other things to repay a loan to the European Central Bank due next week and to clear arrears with the International Monetary Fund.
More than half of the governing left-wing Syriza party's central committee has signed a statement slamming the agreement Greece reached with its European creditors earlier this week, describing it as a coup against their nation by European leaders.
The statement, signed by 109 of the committee's 201 members, says the agreement was "the result of threats of immediate financial strangulation" and is a new bailout with "humiliating terms of supervision, destructive for our country and its people."
Greece's parliament is expected to vote Wednesday on the austerity bill required to get a new bailout package.
"On July 12 a coup was carried out in Brussels that proved that the aim of the European leadership was the exemplary annihilation of a people who envisaged that another path could be followed beyond the neoliberal model of extreme austerity," the statement says. "A coup that goes directly against any kind of notion of democracy and popular sovereignty."
Germany says eurozone leaders were aware of the International Monetary Fund's analysis of Greece's debt situation when they drew up a preliminary bailout package and that, while Berlin takes the IMF's conclusions seriously, its position isn't new.
The IMF said Tuesday that Greece needs debt relief going "far beyond what Europe has been willing to consider so far." Germany says an outright debt cut would be illegal under European law and argues that there's only limited room for manoeuvr on lesser forms of debt relief.
Finance Ministry spokesman Martin Jaeger says that the European approach of making countries' debt sustainable by getting budgets in shape has worked well elsewhere.
He says Germany still believes that approach can work in Greece with the help of economic reforms and a privatization fund.
The European Commission says there are "serious concerns" about the sustainability of Greece's debt load amid a worsening in its economy.
The Commission says in a report that its main forecasts are for debt to reach 165 per cent of GDP in 2020, 150 per cent in 2022 and 111 per cent in 2030. In an 'adverse' scenario, in which the economy does worse than expected, the debt load would hit a massive 187 per cent, 176 per cent and 142 per cent, respectively.
The left-wing government of Prime Minister Alexis Tsipras took office in January. The Commission says that since the end of last year, there was a "very significant weakening of commitment to reforms and backtracking on previous reforms" which quickly led to a "significant deterioration of debt sustainability."
The Commission has cut its growth estimates and expects up to a 4 per cent contraction in Greece's economy this year, compared with a 0.5 per cent rise predicted early this year.
Greece's Alternate Finance Minister Nadia Valavani has resigned from government in protest over the austerity measures the country is asked to implement in exchange for a bailout.
Arriving in Parliament, Valavani said she was not going to vote in favour of the agreement, and that this meant she could not stay on as part of the government.
Earlier, Greece's finance ministry released a letter she had sent to the prime minister on Monday morning, saying that if he returned from Brussels having made commitments for harsh austerity measures she would be unable to continue as a member of the government.
Prime Minister Alexis Tsipras agreed to a deal Monday morning under which Greece must pass through parliament harsh austerity measures his left-wing government had long battled against in return for the start of negotiations on a third bailout of about 85 billion euros.
The European Commission is proposing to give Greece 7 billion euros in loans from a special fund overseen by all 28 EU nations so it can meet debts due in coming days.
The loan would be made pending the start of a full bailout program agreed on between the 19 eurozone leaders on Monday.
Since Greece needs to meet debt payments as soon as next week, eurozone nations have been looking for a way to give it a first, quick loan. They are considering tapping a fund, the EFSM, which is backed by all 28 countries in the EU. The problem is that non-euro nation Britain does not want to help pay for Greece, which it considers a eurozone issue.
EU Commissioner Valdis Dombrovskis says that dipping into the EFSM "is not an easy option" but says there are no other obvious options.
Once the full bailout package is operational, the initial loan could be repaid with money from the new program.
Dombrovskis adds that the commission is looking for guarantees to protect non-euro nations on such a loan.
An independent United Nations expert on foreign debt says Greece's creditors may break international law if the austerity measures they demand lead to undue hardship.
Juan Pablo Bohoslavsky says he is concerned about reported shortages of medicines and food caused partly by restrictions on money transfers.
He says in a statement Wednesday that European institutions, the International Monetary Fund and the Greek government must ensure that any bailout deal safeguards the right to health care, food and social security.
Bohoslavsky says "there is real legal risk that some of the harsh austerity measures could be incompatible with European and international human rights law."
He is scheduled to visit Greece Nov. 30 to Dec. 7.
Greece's finance ministry says the banks will remain closed through Thursday.
The ministry says the transactions that can be carried out at the few bank branches that are allowed to open are being broadened. Apart from allowing pensioners without bank cards to withdraw 120 euros per week, they will also process payments for credit card bills, debts to the state like taxes and utility bills, and the payment of insurance company bills.
They will also allow the transfer of funds between accounts in the same bank.
Banks have been shut in Greece since June 29 and capital controls have been imposed restricting ATM cash withdrawals to 60 euros per day, and to 120 euros per week for pensioners and the unemployed without bank cards. Credit and debit card payments within the country are allowed, as are electronic banking transactions within the country. Bill payments abroad or sending funds abroad require special permission.
Spanish Prime Minister Mariano Rajoy says he will put the new Greek rescue plan up for debate and vote in Parliament, even though it is not obligatory.
The proposal is more symbolic than anything. Rajoy backs the rescue deal and his conservative Popular Party's absolute majority in Parliament guarantees its approval.
Rajoy made the proposal Wednesday saying Spanish taxpayers were being asked to guarantee a lot of funds under the deal. He did not set a date for the vote.
He announced the measure during a parliamentary debate on the recent European Union summit.
Six EU countries are obliged to submit the plan to parliamentary vote.
A German official says criticism by Greek Prime Minister Alexis Tsipras of the preliminary bailout deal with creditors isn't helpful.
Tsipras told state TV that "the policies imposed on us were irrational" but the deal was the best Greece could get. Creditors are demanding that the Greek Parliament pass initial legislation on Wednesday.
Germany led eurozone countries pushing a hard line. Deputy finance minister Jens Spahn criticized Tsipras' comments, telling ARD television: "This is not just about saving (money); it is about this country needing an idea of how it wants grow economically again, how it wants to be successful, change structures and win trust."
He added: "If someone then says, 'I don't actually stand by what I'm doing now,' I find that difficult. That doesn't necessarily create trust."Suggest a correction