Following the vote, which was passed by 155 votes to 138, with seven abstentions, the FTSE jumped 89.07 points - its biggest one-day gain for more than two months – and the Euro rose to a two week high.
Had Prime Minister George Papandreou lost the vote there would almost certainly have been snap elections and a default on its existing debt, which would have been disastrous for European and global financial stability.
Greek’s largest creditor, Germany was delighted wit the news. Chancellor Angela Merkel said the vote was “really good news” and important for the stability of the Euro.
However, most analysts believe that the vote will only delay the crisis, as Greece’s debt looks unsustainable. Jens Weidmann, president of the German Bundesbank, said: "We've made an important step but we are not at the end yet."
And outgoing European Central Bank member Axel Weber said earlier this week: "ultimately, solving the Greek debt problem will have to deal with the outstanding, past amount of debt".
Following yesterday’s vote, Greece faces the huge question of whether it can implement the austerity programme well enough to satisfy the next inspection of international authorities in three months' time. It also has to raise up to €50bn from the sale of national assets.
Many experts think that this is not enough time. Raoul Ruparel of Open Europe, the London-based think-tank, said: "Although this may pave the way for a second bailout, a Greek default still looks inevitable in the longer term. Delaying tactics will only increase the cost of an inevitable restructuring, particularly for European taxpayers, who soon will own the majority of Greece's debt."
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