Athens' crisis-hit government has survived a much-anticipated vote of confidence as the country's political opposition has renewed calls for its resignation and tens of thousands of Greeks protested outside parliament.
After a bravura speech in which he called on Greeks to "fight together" in overcoming their worst crisis in modern times, prime minister secured the support of his MPs, winning by 155 votes in the 300-seat House.
The vote was seen as vital for Greece to press ahead with austerity measures and avoid defaulting on its colossal €355bn (£297bn) debt.
The roll-call ballot took place while Greeks from all walks of life converged on central Syntagma Square to demonstrate against the government's deeply unpopular fiscal policies.
Angrily punching the air as politicians debated the debt-choked state's parlous economic plight, protestors shouted "we give a vote of no confidence."
As riot police looked on and tensions rose, many threw bottles of water at the parliament.
The confidence vote was but one step in a long and arduous journey to putting near-bankrupt Greece back on its feet – financially, politically and increasingly socially – barely a year after it secured €110bn (£97bn) in emergency aid, the biggest bailout in western history.
Next week Papandreou faces the task of persuading the Greek parliament to endorse further austerity measures — on top of a wave of wage cuts, pension cuts, tax increases and benefit losses that have already prompted thousands to take to the streets in – often violent – protest.
Papandreou has described the measures as a matter of "life or death."
Cash reserves are fast drying up with the economy teetering on the verge of collapse, unable even to cover payments for civil servants or pensioners beyond the end of the month.
But while ever more Greeks also say they believe their country to be bankrupt — a view that few were willing to entertain when the debt crisis erupted eighteen months ago – opposition to the belt-tightening remains overwhelming.
"If these measures pass, Greece will be the guinea pig of the EU," said Stathis Anestis at the General Confederation of Greek workers, the country's largest labour force. "Greek unions will not bow down. They will be present in the struggle of workers."A growing chorus of leading EU figures has added to the pressure by also demanding that Greece's squabbling political elite put aside their differences by giving the measures cross-party support.
Consensus is seen as critical. "National consensus is a prerequisite for success," insisted European Council president Herman Van Rompuy after holding talks with Papandreou on Monday.
However, the country remains divided and attempts at national agreement have so far fallen on stony ground.
Euro bank notes.  
Greek Prime Minister  survived a confidence vote by the Greek parliament late Tuesday night, thus allowing Papandreou to form a new cabinet  constituted to address Greece's severe financial debt crisis.  The vote's outcome is viewed as a measure of confidence in  the government's ability to resolve the problems of the  and  implement the stringent austerity measures  necessary for Greece to receive future  packages from the European Union (EU). 

Papandreou managed to face down internal dissent within his own  over the extremely unpopular austerity measures (he has said the measures are an issue of "life or death") and the final vote of 155 to 143, with two abstentions, matched Papandreou's 155 seats. Meanwhile, Greeks were angrily demonstrating  against the measures outside, throwing bottles at the parliament building as riot police stood by.

Following the confidence vote, Greece will be in a position to look for  further financial aid from the EU to avoid   on its enormous debt, but help from the EU is dependent on the real work that must be done first: the Greek parliament's implementation of the hugely unpopular austerity measures.

Government spokesman Elias Mossialos said in an interview with  before the vote that Greece will be unable to pay wages and pensions after July 15 if the government does not secure the EU financing.   

The vote came in the midst weeks of widespread anti-austerity protests and strikes in major cities throughout Greece, involving clashes between police and demonstrators angry with the proposed slew of layoffs in the public sector which are to accompany the Socialist cabinet's program. 

On Wednesday, , the biggest bond fund in the world, said it was unimpressed with Tuesday's vote of confidence, saying it believes Greece and perhaps other European economies will  ultimately default on their debts. , chief executive of Pimco, said, "Nothing has been done to enhance growth. No single (Greek) indicator has shown strength." 
 
"For the next three years, we're going to see different economies work out different problems. For European economies, especially Greece, it would be through ," said Mohamed El-Erian  in a video conference.

The euro fell against the dollar on Wednesday as financial markets indicated that the  is far from over.

George Papandreou gave an emotional speech to  parliament on Wednesday, saying "We have a unique opportunity (to change the country). If we falter, if we lose heart and squander it... history will judge us very harshly." 

Meanwhile, when the new austerity measures move to parliament for a vote,  Greece's major unions are planning to hold a 48-hour general strike.