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Revision as of 07:17, 15 January 2013

The Greek PM has warned the nation of a collapse in living standards if MPs fail to pass an unpopular austerity bill demanded in return for a 130bn-euro ($170bn; �110bn) bailout.

In a TV address, Lucas Papademos said Greece was "just a breath away from Ground Zero".

The cabinet has approved the measures but five government ministers resigned.

Unions are holding a 48-hour strike, and thousands of protesters rallied in central Athens against the measures.

Riot police were on standby after clashes on Friday, but the demonstrations were mostly peaceful.

The austerity measures are being demanded by the eurozone and IMF - they must now be passed by the Greek parliament and approved by European finance ministers.

Some MPs from the governing parties are expected to vote against the bill, the BBC's Mark Lowen in Athens reports.

But analysts say the package should still have enough support in parliament, because Pasok, the largest party, and its coalition ally New Democracy account for more than 230 deputies out of a total of 300. Catastrophe fear

Mr Papademos said the measures would "decide the country's future" and enable it to stay inside the euro. Continue reading the main story What went wrong in Greece?

An old drachma note and a euro note

   Greece's economic reforms, which 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.

The opening ceremony at the Athens Olympics

   Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.

A defunct restaurant for sale in central Athens

   The country 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.

A man with a bag of coins walks past the headquarters of the Bank of Greece

   Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.

Workers in a rally led by the PAME union in Athens on 22 April 2010

   There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes. 

Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010

   The EU, IMF and European Central Bank agreed 229bn euros ($300bn; �190bn) of rescue loans for Greece. Prime Minister George Papandreou quit in November 2011 after trying to call a referendum.

Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.

   Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.

Lucas Papademos

   Under Prime Minister Lucas Papademos, Greece is trying to negotiate a big write-off of private debts and secure a second bail-out of 130bn euros ($170bn, �80bn) before a 20 March deadline. 

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"The social cost of this programme is limited in comparison with the economic and social catastrophe that would follow if we didn't adopt it," he said.

Savings would be lost, the government would be unable to pay wages or salaries, and imports of fuel, medicine and machinery would be disrupted, he added.

Earlier, Greek conservative leader Antonis Samaras said all his party's MPs must vote in favour of the bailout law.

Mr Samaras, whose New Democracy party is a member of the governing coalition, said any rebels would face being dropped as parliamentary candidates.

Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far.

Her Pasok party, the largest in the coalition, also suffered the loss of a deputy labour minister on Thursday.

The austerity cuts include:

   * 15,000 public-sector job cuts
   * liberalisation of labour laws
   * lowering the minimum wage by 20% from 751 euros a month to 600 euros
   * negotiating a debt write-off with banks.

These were presented to a eurozone ministers in Brussels on Thursday evening.

But they want a further 325m euros in savings for this year and also insist that Greek leaders give "strong political assurances" on the implementation of the packages.

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These letters simply stand for Individual Voluntary Arrangement, this just means that you have are in a contract between creditors that is legally binding. Individuals who find themselves in severe debt can opt to file for something like this. This financial contract is designed to help those who are in a great amount of debt by lessening the amount of money to pay back each month. Lenders, however keen they are on getting their money back, will sometimes offer very reasonable payment terms to help you get out of debt. You will have to agree upon a couple of terms and conditions regarding the minimum amount to pay each month,Aldon Smith Jersey, as well as how long the contract will last for,Vernon Davis Youth Jersey. This all depends on the amount you actually owe,Aldon Smith Women's Jersey. A lot of people would like to have a financial plan that allows them to keep their lifestyle and not have to dramatically adjust anything,Patrick Willis Women's Jersey. A number of families would rather have a plan written-up that works with their own circumstance,Kyle Williams Jersey. This can be done with the help of a professional. Search for the right kind of help by looking for reliable firms around your area,Vernon Davis Kids Jersey. You can learn about new ways to handle your finances that will allow you to pay your debt back with ease. Look for the best firm in your area before your debt gets worse. If you are in debt, you can go in one of two directions. You can either file for bankruptcy or an IVA. Before you make a decision, it is recommended that you seek professional help so that you can determine the best way to go,Tarell Brown Jersey. An Individual Voluntary Arrangement, or IVA, is a financial agreement with your creditors,Vernon Davis Jersey. If you need advice abotu an IVa,Patrick Willis Youth Jersey, contact Delta Debt Management,Patrick Willis Jersey.

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