<p>Greece's cabinet today approved tough austerity measures demanded by EU and IMF creditors after the prime minister warned that a failed debt deal and default would spark ''uncontrolled chaos''.<br /><br /></p>.<p>The coalition government, hit by defections yesterday, approved the belt-tightening measures after a day that saw renewed street clashes between protesters and police and the start of a two-day general strike.<br /><br />Unions are preparing further demonstrations for the second day of the strike.<br />Prime Minister Lucas Papademos issued a stern warning after six members of his coalition government resigned in protest at the new cuts.<br /><br />"A disorderly default would plunge our country into a disastrous adventure," he told the cabinet.<br /><br />"It would create conditions of uncontrolled economic chaos and social explosion."<br />He warned that "sooner or later, (Greece) would be led out of the euro" and stressed, "This is an hour of historic responsibility."<br /><br />The remaining cabinet members in the early hours yesterday unanimously approved the debt deal and austerity measures, which save Greece from a disorderly default in March, the prime minister's office said.<br /><br />The Athens News Agency (ANA) said the deal was submitted to parliament for a vote on Sunday but government spokesmen could not be reached for comment.<br /><br />Greece was explicitly told by its eurozone partners this week that it must agree to austerity measures in order to secure the release of further loans under a USD 171 billion bailout pending since October.<br /><br />The rescue fund is essential to stave off bankruptcy on March 20, when Athens must repay nearly 14.5 billion euros in maturing debt.<br /><br />A five-week streak of gains on US markets ended yesterday after revived worries that Greece will default on its huge mountain of debt sent stocks falling.</p>
<p>Greece's cabinet today approved tough austerity measures demanded by EU and IMF creditors after the prime minister warned that a failed debt deal and default would spark ''uncontrolled chaos''.<br /><br /></p>.<p>The coalition government, hit by defections yesterday, approved the belt-tightening measures after a day that saw renewed street clashes between protesters and police and the start of a two-day general strike.<br /><br />Unions are preparing further demonstrations for the second day of the strike.<br />Prime Minister Lucas Papademos issued a stern warning after six members of his coalition government resigned in protest at the new cuts.<br /><br />"A disorderly default would plunge our country into a disastrous adventure," he told the cabinet.<br /><br />"It would create conditions of uncontrolled economic chaos and social explosion."<br />He warned that "sooner or later, (Greece) would be led out of the euro" and stressed, "This is an hour of historic responsibility."<br /><br />The remaining cabinet members in the early hours yesterday unanimously approved the debt deal and austerity measures, which save Greece from a disorderly default in March, the prime minister's office said.<br /><br />The Athens News Agency (ANA) said the deal was submitted to parliament for a vote on Sunday but government spokesmen could not be reached for comment.<br /><br />Greece was explicitly told by its eurozone partners this week that it must agree to austerity measures in order to secure the release of further loans under a USD 171 billion bailout pending since October.<br /><br />The rescue fund is essential to stave off bankruptcy on March 20, when Athens must repay nearly 14.5 billion euros in maturing debt.<br /><br />A five-week streak of gains on US markets ended yesterday after revived worries that Greece will default on its huge mountain of debt sent stocks falling.</p>