Protests Erupt Outside of Greek Parliament as It Approves Harsh Austerity

But instead of taking a harder line with the creditors, Tsipras and a majority of the cabinet decided to put forward a proposal capitulating to EU and European Central Bank demands for additional austerity measures in a country whose economy has contracted 25 percent since 2010.

For months, Prime Minister Alexis Tsipras and his Syriza party rallied against the reforms.

Greece’s fellow states in the 19-country eurozone said they were willing to open talks on a new rescue package worth 85 billion euros ($93 billion) over three years after Athens approved a series of tax hikes and economic reforms overnight.

Greek Prime Minister Alexis Tsipras delivers his speech at a parliamentary session in Athens, July 16, 2015.

The PM suffered a major mutiny from his lawmakers – 32 out of 149 voted against the measures, and a further six abstained – and he was forced to rely on the support of pro-European opposition parties.

Meanwhile, opponents of the bailout measures took to the streets of Athens on Wednesday night in mainly peaceful protests ahead of the vote.

Stepping down from his post – in which he frequently butted heads with Germany’s Wolfgang Schäuble and other eurozone finance ministers who would not relent on the austerity-and-privatizations program they had set out for Greece – has allowed Varoufakis, no shrinking violet, to speak even more freely than he had.

Greek lawmakers passed a bailout agreement that keeps the country in the euro for now, shifting attention to the European Central Bank as it weighs whether to pump more money into the country’s hobbled financial system.

Greek Energy Minister Panagiotis Lafazanis said he would quit if Mr Tsipras sought his resignation.

Concerns have also been raised about the stability of the bailout after a leaked International Monetary Fund report emerged that suggested the new deal will not solve Greece’s problems, and its debts could rise further to 200% of GDP.

The Moody’s credit ratings agency said the vote meant the country had dodged imminent danger, but that it still faced risks.

The vote will nearly certainly see large numbers of Syriza lawmakers dissent and vote against the package, raising questions of the government’s survival in its current form.

“I don t know if we did the right thing”.

Deputy Finance Minister Nadia Valavani was the first to formally submit her resignation from the ministry and parliament on Wednesday, denouncing the debt deal as “unsustainable“.

Tsipras says he was able to score a significant victory in the deal he struck with fellow European leaders: their agreement to look at ways of easing Greece’s colossal load of public debt, which exceeds $300 billion.

But he said he had no option if he was to prevent Greece’s financial collapse.