But parliament's approval came amid more worrying signs in Greece, with hundreds of taxi drivers staging a two-day strike in opposition to the new measures and as the country's borrowing rate shot up.

Demonstrations

Taxi drivers held demonstrations in Athens, the capital, over the government's plans to cut spending in an attempt to reduce the national deficit, which sits at nearly 13 per cent of output.

The protesters also want the government to abandon attempts to open up the taxi industry to further competition.

Lawyers on Wednesday kept up a three-day strike that started on Monday, against the taxation bill.

More strikes are expected on Thursday, with public transport workers reportedly staging a walk-out for six hours and school teachers for three hours.

Meanwhile Greece's borrowing rate leapt above seven per cent, despite a eurozone agreement on Sunday for a stand-by rescue.

Greece has to borrow heavily to avoid default and pay current bills including some pension entitlements, and the interest rate or yield it has to offer has become critical to the nation's future.

The yield, which had fallen sharply in initial reaction to the EU agreement, was 6.815 per cent on Tuesday, having hit a record of slightly more than 7.5 per cent last Thursday.

Greece has said that such a high cost of borrowing is untenable as it negates much of the saving expected from drastic economic reforms imposed by the European Union.

For this reason Athens pressed the EU to craft an EU-IMF safety net, and the accord reached on Sunday would make Greece eligible for at least $41bn in an emergency.

The deal was intended to bolster Greece's credibility on the bond market, reduce risk and pull down the rate demanded.