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Greek PM warns of euro exit

Athens - Greek Prime Minister Antonis Samaras warned again on Sunday that the debt-crippled country could be forced out of the euro if parliament fails to approve a new round of austerity measures needed for a lifeline from creditors.

"We must save the country from catastrophe... if we fail to stay in the euro nothing will make sense," he told lawmakers from his conservative party.

Parliament is due to vote Wednesday on a bill outlining €18bn of cuts and other reforms, followed by a vote on Sunday on the 2013 budget as Greece battles to secure a new tranche of aid from its troika of international creditors.

Samaras said the votes were vital to "put an end once and for all" to the risk that Greece, faced with a crushing debt mountain, could return to the drachma.

He called on coalition partners, the socialist Pasok and the moderate left-wing Dimar (Democratic Left) parties, which have raised concerns about the scope of the measures, to act in the "supreme interests of the nation".

Greek unions however are planning a two-day strike from Tuesday to coincide with the austerity vote amid seething public anger over further painful cuts in a country that is heading for its sixth year of recession.

Greece has been negotiating with the European Union, International Monetary Fund and the European Central Bank to unlock a €31.5bn tranche of a bailout package or risk bankruptcy in mid-November.

But the IMF said last week that the talks were stalled over the conditions for financing Greece, which has been seeking a two-year extension to meet its fiscal goals, sending stocks crashing.

The Dimar party, which has 16 deputies, has suggested it would vote against the bill Wednesday because of its objections to labour market deregulation proposals, while up to five socialist lawmakers could also defy Samaras.

The dissenters would leave the government with a narrow majority, with just 154-159 seats in the 300-member assembly, the Greek press said on Sunday, while predicting the measures would nevertheless go through.

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