The European Union has welcomed the decision of the Greek parliament to approve the first of two bills, introducing an EU/IMF austerity package.
Outside parliament, there were fierce clashes between stone-throwing masked youths and riot police, who fired teargas from behind steel crash barriers to keep the rioters at bay.
It has been reported that 21 police and 51 protesters were injured.
In a joint statement, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said the move pulls the country back from the threat of default and paves the way for a second aid package.
The two EU leaders also said that if the second stage of the vote was also passed tomorrow, as is now expected, it would pave the way for disbursement of the next €12bn tranche of financial assistance to Athens, and allow work to proceed rapidly on a second assistance package later this year.
The parliament approved a five-year package of spending cuts, tax rises and state asset sales by a comfortable margin of 155 votes to 138, handing a significant victory to Prime Minister George Papandreou.
In a final appeal just before the crucial vote, the Socialist premier told lawmakers they must avoid the country's collapse at all costs.
Outside parliament, there were fierce clashes between stone-throwing masked youths and riot police, who fired teargas from behind steel crash barriers to keep the rioters at bay.
One group of anarchists armed with sticks and iron bars attacked the finance ministry offices, smashing windows, before they were driven off police in more than two hours of clashes.
With social unrest mounting, it remains unclear whether or not the government can implement the harsh measures, even if it wins all this week's parliamentary votes.
Tánaiste Eamon Gilmore has described the situation in Greece as 'not pretty' and 'not pleasant'.
Speaking to journalists this morning, Mr Gilmore said the Government was looking at what was happening there and that it was a concern.
He said it was important to look at what was happening generally in Europe and it was important that the European economy recover and the Euro remained strong.
Follow RTÉ's Europe Editor Tony Connelly in Athens on Twitter
