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Germany’s finance minister says the Greek Parliament’s approval of an austerity package is “an important step” but is warning that talks on a final bailout deal will be tough – and that an outright debt cut would be incompatible with Greece keeping...

Following an emotional debate and early-morning vote, the country’s parliament approved a raft of austerity measures that its global creditors had demanded as a first step before negotiating a final rescue deal. A total of 64 MPs voted No and six abstained.

The Greek bill was the first step in meeting requirements for negotiations to start on a desperately needed third global bailout for Greece – a three-year 85 billion euros ($93 billion) package – that will prevent it from crashing out of Europe’s common currency.

The new ministers are expected to be sworn in on Saturday.

Dimitris Vitsas was appointed new alternate defence minister, replacing Costas Isichos, another SYRIZA lawmaker who voted against the agreement. But nearly a fifth of Merkel’s conservatives voted “no” in a blow to the chancellor.

Athens shuttered banks and imposed capital controls at the end of last month, bringing the economy to a virtual standstill and forcing Greeks to queue for hours for cash.

The Europeans insisted on the Greek Parliament voting for these tough measures as they say Greece suffers from a huge “trust deficit” and that they need some assurance that the Greeks are honest about implementation.

Several sources said there was consensus among the other 18 ministers around the table during the “exceptionally difficult” talks that the leftist government in Athens must take further steps to convince them it would honor any new debts.

The eurozone turned the screw after finance ministers finished two days of intense talks on Greece’s reform proposals drawn up to satisfy its global creditors – the EU, the European Central Bank and the global Monetary Fund.

Leaders are discussing new proposals put forward by their finance ministers.

Lawmakers in the Greek parliament overwhelmingly backed a package of economic reforms and further austerity measures, in the hope that it would convince European creditors to back a third bailout of the country.

The pressure has been on Greece all day even after the Greek parliament passed a harsh austerity package that it hopes will lead to a three-year bailout.

“It’s clear that talks are likely to include some extent of debt recast or write-downs to provide relief to Greek public finances”.