Greece's Parliament was late last night set to adopt a crisis budget aimed at bringing order to the debt-hit country's chaotic public finances and restore its badly dented credibility abroad.
The ruling Socialists, who hold a 10-seat edge in the 300-seat house, were expected to carry the midnight vote on the 2010 plan that aims to cut Greece's €30.5 billion public deficit by €8.4 billion.
The Socialists, elected in October on an economy rescue ticket, have already warned that the 2010 budget is the nation's "toughest" since the restoration of democracy in 1974 after seven years of military rule.
The government is struggling to restore investor confidence and muster funds to service an estimated €300 billion debt following three successive downgrades from international credit rating agencies this month.
The Budget aims to reduce the deficit from 12.7 per cent of output to 9.1 per cent in 2010, which would still exceed the limit of three per cent for countries that use the single European currency.
The Socialists pledged to cut waste in the bloated Greek civil service and public sector and boost revenue through a crackdown on entrenched tax evasion.
But the markets have shown little inclination to wait for reforms that successive Greek governments have promised yet failed to implement.
And Greece's European Union peers are also losing patience with Athens, which revised crucial economic figures twice in the last five years. "Our credibility deficit is more important than the deficit in our public finances," Finance Minister George Papaconstantinou told Parliament this week.
Fears for Greece's ability to keep up with its massive debt mounted this month after a solvency scare in the once-flourishing Gulf emirate of Dubai.
Questions also arose about possible implications for the broader eurozone, where several other countries are struggling with debt.
Mindful also of the reaction that austerity plans are likely to get from Greece's powerful unions, the three main credit rating agencies have shown their concern by cutting the country's sovereign debt grade.
Fitch and S&P lowered Greece's rating to BBB plus from A minus earlier this month. On Tuesday, Moody's completed the triple downgrade with another one-notch cut from A1 to A2.
Greece still has room for manoeuvre as the European Central Bank eased its rating requirements for government bonds in the wake of the global financial crisis, but the ECB is expected to restore the minimum A minus level in 2011.
Greece's second-largest union that represents some 200,000 civil servants said it would strike in late January or early February to defend its members' benefits which the government is targeting for cuts.
The government's new tax plans are expected to be finalised at that time.
The opposition Conservatives, who were in power for the last five years, say the government lacks a coherent plan and wasted precious time after winning a snap election in October called by former Prime Minister Costas Karamanlis.
New Conservative leader Antonis Samaras, who replaced Mr Karamanlis after the election defeat, was to head the attack on the government in Parliament.