Greece says ‘yes’ to austerity package

The Greek parliament has narrowly voted to approve a drastic austerity package despite facing widespread opposition.

The proposed tax hikes and spending cuts – worth €28bn – have been deeply unpopular with the Greek public.

A nationwide 48-hour strike is under way and clashes between police and protesters have been reported.

However, the package of reforms was vital in order for the country to secure the latest tranche of a 110bn-euro (£98bn) loan.

There will be a second vote on Thursday for the implementation of different parts of the package, such as tax rises and the sale of state assets.

Ahead of the vote, PM George Papandreou had urged MPs to approve the package by consensus.

Investors were dumping Greek bonds on concern about a potential default prior to the vote.

The yield on the country’s two-year government bond was at 27% at 1:33 p.m. in Athens, compared with 12% at the start of the year. German bunds of similar maturity had a yield of 1.52%.

After the vote the yield on two-year debt moved in marginally, with Greek 2-yr bonds yielding 25.99%, compared to German 2-yr bunds at 1.54%, according to Tradeweb.

The yield on ten year debt rwas up 0.025% at 16.57%.

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