Greeks riot as lawmakers pass austerity measures

ATHENS, Greece - Greek lawmakers voted Wednesday in favor of new austerity measures needed to secure crucial bailout funds as protesters opposed to the bill clashed with riot police outside Parliament.

The bill needed a simple majority to pass and Prime Minister George Papandreou was able to collect enough votes even though one of his deputies said he would not be backing the package.

A no vote would have pushed Greece to the brink of default as soon as next month with potentially huge repercussions for Europe's banking sector and global markets.

MoneyWatch: With votes counted, long-term questions arise

As lawmakers voted inside Parliament, riot police fired volleys of tear gas to push back protesters, who were pelting police with bottles and trash and overturning barriers.

CBS News correspondent Mark Phillips, reporting from a balcony overlooking Athens' central square and shielding his face from tear gas, said the nation's frustration was rapidly boiling over into violence.

Greece is broke, and the feeling on the street is that the common man is being made to pay for years of government mismanagement of resources, says Phillips.

Phillips, seen at left, adds that the situation on Athens streets could grow even worse on Thursday, when the government is set to decide exactly how to implement the cuts.

The package, which involves euro28 billion ($40 billion) worth of spending cuts and tax increases over five years, is a condition for the eurozone and the International Monetary Fund to release the next euro12 billion ($17 billion) installment of the country's bailout fund.

Deputy Finance Minister stressed the vote -- and the measures in the bill -- were essential for Greece to be able to tame its rampant debt.

"Without additional measures, the budget deficit would go back up and would reach 14.5 percent in 2015," he said. "The same is true for the national debt -- and that's presuming that someone on this planet would keep lending Greece money while we continue to run high deficits."

Wednesday's vote came against a backdrop of violent demonstrations and on the second day of a nationwide general strike that has brought much of Greece to a standstill. Hundreds of flights and ferried have been canceled, leaving tourists stranded during the summer high season.

Protesters tried to encircle Parliament to prevent deputies from entering and voting for the bill and a massive security operation was under way, with a large section of central Athens sealed off to traffic.

Scuffles broke out early in the morning as demonstrators attempted to block a major avenue leading to the center of the city, and to Parliament. Riot police responded with pepper spray, and 10 people were treated in a nearby hospital for minor injuries, hospital officials said.

Demonstrators also hoisted ghoulish effigies of men they hold responsible for Greece's misfortune -- Papandreou, new Finance Minister Evangelos Venizelos and Deputy Prime Minister Theodoros Pangalos -- and shook them in the air on sticks.

"Dogs, you look after your masters," they chanted at police. The furious marchers also emptied bags of garbage from municipal containers and lobbed them at the security forces, who stood their ground impassively.

A day earlier, extensive clashes left at least 46 people injured, most of them police, as rioters pelted police with chunks of marble and ripped up paving stones, and authorities responded with repeated volleys of tear gas and stun grenades.

Greece has said it has funds only until mid-July, after which it will be unable to pay salaries and pensions, or service its debts, without the next bailout installment from the eurozone and the International Monetary Fund. The country is also in talks for additional help in the form of a second bailout, which the prime minister has said will be roughly the size of last year's euro110 billion ($157 billion) package.

"Voting these measures is required to maintain our credibility in the (bailout) process," Venizelos said during the debate Tuesday night. "Voting for these measures, regardless of any reservations, is an important, brave act of political responsibility."