Greek government wins vote of confidence

Greece's embattled government survived a confidence vote crucial to avoiding a sovereign default, as thousands of protesters chanted insults outside parliament.

The assembly voted confidence in the government, reshuffled by Prime Minister George Papandreou to stiffen resolve behind a painful new austerity programme, by 155 votes to 143 with two abstentions. All Papandreou's Socialist Party deputies voted solidly with the government.

"If we are afraid, if we throw away this opportunity, then history will judge us very harshly," Papandreou said in a final appeal for support before the vote.

The closely watched vote had an immediate impact with the euro making gains, although traders said continuing concerns about implementation of the measures contained the currency's advance.

Protesters besieged parliament in Syntagma square, chanting slogans against the politicians, shining hundreds of green laser lights at the building and into the eyes of riot police outside and pushing their hands forward in a traditional insult.

Papandreou's government must rapidly pass two more tests -- enacting the austerity plan and the laws needed to implement it -- to win a new bailout to avert the euro zone's first sovereign default and possible global economic disaster.

The vote follows a European ultimatum requiring the debt-choked Mediterranean state to implement a new five-year package of deeply unpopular reforms in two weeks or miss out on a 12-billion euro aid tranche and plunge into bankruptcy.

European Commission President Manuel Barroso piled on the pressure before the vote, saying that Greece faced a "moment of truth" and needed to show it was genuinely committed to the reforms.

"No-one can be helped against their will," Barroso said in Brussels, adding that backing from the political opposition -- which has so far rejected the package and called for elections -- was important for success.

Acting IMF chief John Lipsky sent a similar message, saying international lenders were willing to help peripheral euro zone economies as long as they tried to carry out reforms.

He said the Greek fiscal system was broken but could be fixed with the right political will.