**Greece said it had agreed a deal with the European Union and IMF to rescue the nation’s embattled economy.**Prime Minister George Papandreou said that avoiding bankruptcy was the country’s priority but that Greece would have to make “great sacrifices”.
Details of the rescue deal and the austerity cuts agreed to in return for the loans will be announced later.
There are fears that Greece’s debt crisis could spread to other countries using the European single currency.
On Saturday, police again clashed with demonstrators in Athens who were protesting against government measures.
‘Evident’ anger
European finance ministers will gather in Brussels later on Sunday and are expected to approve the bail-out, which is which is designed to prevent Greece from defaulting on its enormous debt.
The rescue package is expected to amount to as much as 120bn euros (£100bn; $160bn) over three years.
In return the Greek government will unveil a fresh round of sweeping efficiencies, expected to include further tax rises and deeper cuts in pensions and public service pay.
Mr Papandreou said that active and retired public sector workers would bear the brunt of the new wave of budget cuts.
“With our decision today our citizens will have to make great sacrifices,” he said, describing public anger at the new wave of cutbacks as “evident”.
“Our national red line is to avoid bankruptcy,” Mr Papandreou said, adding that “no-one could have imagined” the size of the debt that the previous government, which left office last year, had left behind.
‘No easy path’
Finance Minister George Papaconstantinou will head to Brussels later for an extraordinary gathering of the 15 other eurozone finance ministers.
The eurozone countries are speeding up rescue efforts for Greece amid fears its debt crisis could pull down other members - with particular concerns having been raised about Portugal, Spain and Ireland.
German Chancellor Angela Merkel said that the deep cuts imposed on Greece in return for the rescue would spur other troubled eurozone to do all they could to avoid the same fate.
“These countries can see that the path taken by Greece with the IMF is not an easy one. As a result they will do all they can to avoid this themselves,” Mrs Merkel told the Bild am Sonntag newspaper.
During Saturday’s clash between demonstrators and police at the finance ministry in the capital a state TV truck was petrol-bombed and a prominent hotel was vandalised in the central Syntagma square.
Thousands of Greeks took part in May Day rallies called by trade unions and left-wing parties. Protesters hurled bottles and rocks and fought running battles with police in riot gear.
Our correspondent says the unions hope the rallies will demonstrate to the government, the eurozone, the IMF and the international markets, that they can mobilise enough people to defeat the new austerity programme.
The BBC’s Malcolm Brabant in Athens says the latest study of Greek attitudes shows most people are angry and dismayed about the bail-out, because they do not feel responsible for causing the crisis.
Are you in Greece? Have you seen the protests? Do you support them? What do you think of the government’s austerity measures?
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