Athens braced for protests over EU's austerity demands

Athens is braced for a stormy day of protests that will culminate tonight in a vote on a controversial set of austerity measures that European Union leaders have demanded of Greece in return for another economic bailout.

The country's powerful public-sector unions have called for a mass action to "overthrow" the austerity measures and tens of thousands of protesters from all walks of life are expected to descend on parliament today.

The Greek government has been told by the EU and International Monetary Fund that it must pass the €28bn (£25bn) package of cuts, tax increases and an unprecedented sell-off of public assets to get the last installment of its previous bailout, without which it would default on its debts by mid-July.

Prime Minister George Papandreou dragged his beleaguered Socialist Party through a confidence vote last week but faces a more difficult task of persuading MPs to vote for more austerity against a backdrop of furious public protests and a shrinking economy.

Government sources said they were "confident" that enough parliamentarians from the ruling party would back the measures – although a handful of defectors are expected to vote against the package.

Several MPs from smaller parties are likely to vote with the government but a "no" vote remains a possibility, with analysts warning that this could plunge Greece into a disorderly default and exit from the euro.

But there are few signs that the first bailout and accompanying austerity measures have worked and the public has little faith that a repeat dose will correct the debt crisis.

Yannis Varoufakis, a Greek economist who proposes that the European Central Bank (ECB) should issue euro-bonds to solve the sovereign-debt crisis, said the package was "catastrophic" and should be voted down: "It's a litany of failures waiting to happen."

Some analysts accuse the EU leadership and the ECB of using a short-term fudge to delay politically difficult decisions on a crisis that threatens the banking sector and the euro.

The government has defended the measures and warned that Greece faces a plunge into the "abyss" unless the country unites behind its reform drive.