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| - | 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.
| + | George Osborne is considering cutting the 50p top rate of income tax in next week's Budget, the BBC understands. |
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| - | In a TV address, Lucas Papademos said Greece was "just a breath away from Ground Zero".
| + | Prime Minister David Cameron will discuss the Budget with the chancellor and other senior ministers on Friday. |
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| - | The cabinet has approved the measures but five government ministers resigned.
| + | There is speculation the tax on earnings over �150,000 could be reduced to a 45p rate or scrapped entirely in return for tax cuts for low earners. |
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| - | Unions are holding a 48-hour strike, and thousands of protesters rallied in central Athens against the measures.
| + | Labour leader Ed Miliband said it was the "wrong priority" and money should be spent on jobs for young people. |
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| - | Riot police were on standby after clashes on Friday, but the demonstrations were mostly peaceful.
| + | The coalition's "quad" of top ministers, Conservatives Mr Cameron and Mr Osborne and Lib Dems Nick Clegg and Danny Alexander are discussing the Budget by telephone on Friday. |
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| - | 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.
| + | All budget decisions will have been made by the end of Friday so that the details can be sent to the Office for Budget Responsibility. |
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| - | Some MPs from the governing parties are expected to vote against the bill, the BBC's Mark Lowen in Athens reports.
| + | The government-appointed body will use these tax and spending decisions to make its economic forecasts. |
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| - | 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.
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| - | Catastrophe fear
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| - | Mr Papademos said the measures would "decide the country's future" and enable it to stay inside the euro.
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| | Continue reading the main story | | Continue reading the main story |
| - | What went wrong in Greece?
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| - | An old drachma note and a euro note
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| - | 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.
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| - | The opening ceremony at the Athens Olympics
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| - | 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.
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| - | A defunct restaurant for sale in central Athens
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| - | 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.
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| - | A man with a bag of coins walks past the headquarters of the Bank of Greece
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| - | Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
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| - | Workers in a rally led by the PAME union in Athens on 22 April 2010
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| - | 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.
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| - | Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010
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| - | 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.
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| - | Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.
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| - | 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.
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| - | Lucas Papademos
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| - | 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.
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| - | 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.
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| - | Earlier, Greek conservative leader Antonis Samaras said all his party's MPs must vote in favour of the bailout law.
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| - | Mr Samaras, whose New Democracy party is a member of the governing coalition, said any rebels would face being dropped as parliamentary candidates.
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| - | Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far.
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| - | Her Pasok party, the largest in the coalition, also suffered the loss of a deputy labour minister on Thursday.
| + | For a chancellor sometimes likened to a submarine - George Osborne has never been timid about deploying a torpedo� |
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| - | The austerity cuts include:
| + | image of Ben Wright Ben Wright Political correspondent, BBC News |
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| - | * 15,000 public-sector job cuts | + | Is Osborne planning a 50p tax surprise? |
| - | * liberalisation of labour laws
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| - | * lowering the minimum wage by 20% from 751 euros a month to 600 euros
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| - | * negotiating a debt write-off with banks.
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| - | These were presented to a eurozone ministers in Brussels on Thursday evening.
| + | The 50% income tax rate was introduced by the previous Labour government in 2010, to help pay for declining government revenues during the recession. |
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| - | 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.
| + | Mr Osborne has always said it was a temporary measure and has asked officials to assess how much extra it is raising. |
George Osborne is considering cutting the 50p top rate of income tax in next week's Budget, the BBC understands.
Prime Minister David Cameron will discuss the Budget with the chancellor and other senior ministers on Friday.
There is speculation the tax on earnings over �150,000 could be reduced to a 45p rate or scrapped entirely in return for tax cuts for low earners.
Labour leader Ed Miliband said it was the "wrong priority" and money should be spent on jobs for young people.
The coalition's "quad" of top ministers, Conservatives Mr Cameron and Mr Osborne and Lib Dems Nick Clegg and Danny Alexander are discussing the Budget by telephone on Friday.
Temporary tax
All budget decisions will have been made by the end of Friday so that the details can be sent to the Office for Budget Responsibility.
The government-appointed body will use these tax and spending decisions to make its economic forecasts.
Continue reading the main story
�Start Quote
The 50% income tax rate was introduced by the previous Labour government in 2010, to help pay for declining government revenues during the recession.
Mr Osborne has always said it was a temporary measure and has asked officials to assess how much extra it is raising.
