Greek parliament votes in favour of austerity measures

Prime Minister George Papandreou said violence was "not a solution"

Greece's parliament has voted in favour of the hefty cuts and reforms proposed by the government to address the country's financial crisis.

With 172 of 300 votes in favour, one report said a second vote would have to be passed for the bill to become law.

The vote comes a day after three bank workers died in a petrol bomb attack as demonstrations over the planned austerity measures turned violent.

The finance minister said the measures were the only way to avoid bankruptcy.

But as the vote was held demonstrators gathered outside parliament to protest against the measures.

Wednesday's deaths have shocked many in Greece. Bank workers have gone on strike in anger at the loss of their colleagues.

Mourners paid their tributes outside the bank where the three workers were killed

Speaking in parliament ahead of the vote, Prime Minister George Papandreou said violence was "not a solution".

"The future of Greece is at stake," he said. "The economy, democracy and social cohesion are being put to the test."

He expelled three Socialist deputies from his parliamentary team for abstaining in the vote.

The expulsions still leave Mr Papandreou with a majority of members in the house (157 out of 300).

'Avoid bankruptcy'

Greek finance minister George Papaconstantinou has warned Greece is two weeks away from defaulting on part of its debt; bonds worth 8.5bn euros ($12bn; £7.2bn) fall due on 19 May.

GREEK AUSTERITY MEASURES Public sector pay frozen until 2014 Public sector salary bonuses - equivalent to two months' extra pay - scrapped or capped Public sector allowances cut by 20% State pensions frozen or cut; contribution period up from 37 to 40 years Average retirement age up from 61 to 63; early retirement restricted VAT increased from 19% to 23% Taxes on fuel, alcohol and tobacco up 10% One-off tax on profits, plus new gambling, property and green taxes Cracks widen in Greek society Greek austerity: British views Greece's austerity measures 'Contagion risk' for Europe banks

"The state's coffers don't have that money," he told parliament earlier. "Because today... the country can't borrow it from the international market.

"And because the only way for the country to avoid bankruptcy and suspension of payments is to take the money from our European partners and the International Monetary Fund."

But in order to receive the 110bn euro ($142bn; £95bn) bail-out, Greece must agree to a three-year austerity programme, he said.

The measures include wage freezes, pension cuts and tax rises.

The aim is to achieve fresh budget cuts of 30bn ($38bn; £25bn) euros over three years, with the goal of cutting Greece's public deficit to less than 3% of GDP by 2014. It currently stands at 13.6%.

'Fair demands'

Wednesday's deaths - the first such fatalities in protests in nearly 20 years in Greece - have shocked many people in Greece.

What went wrong in Greece? Greece's economic reforms that led to it abandoning the drachma as its currency in favour of the euro in 2002 made it easier for the country to borrow money. Greece went on a debt-funded spending spree, including high-profile projects such as the 2004 Athens Olympics, which went well over budget. It was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics. Greece's economic problems meant lenders started charging higher interest rates to lend it money and widespread tax evasion also hit the government's coffers. There have been demonstrations against the government's austerity measures to deal with its 300bn euro (£267bn) debt, such as cuts to public sector pay. Now the government is having to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund. Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money. BACK 1 of 7 NEXT The Marfin bank branch where the two women - one pregnant - and a man died has become the focus for grieving, with a steady stream of flowers being placed at the front door by people paying their respects, the BBC's Duncan Kennedy in Athens reports. Shops and businesses have been clearing up after the riots. Many are boarded up, others are burnt out shells, he adds. Bank workers took to the streets on Thursday to demonstrate their outrage at the deaths. President Karolos Papoulias has warned Greece is on the "brink of the abyss". "We are all responsible so that it does not take the step into the void," he said in a statement. However, unions have been undeterred by Wednesday's events, urging members to continue demonstrating. The GSEE private sector union condemned the "fires, blind violence, vandalism", but added: "We are determined to pursue and extend our struggle to meet our fair demands."