The European Commission has welcomed the Greek parliament's decision to approve tough new austerity measures.

Economics commissioner Olli Rehn urged Greek officials to "take ownership" and fully implement the reforms, demanded by the EU in return for a huge bailout.

But the measures attracted massive protests throughout Greece. Buildings were set on fire in Athens and police used tear gas to disperse the crowds.

The government confirmed later that an election would be held in April.

Analysts say the biggest party in the governing coalition, the socialist Pasok, is likely to suffer at the hands of the electorate.

Greece is trying to secure a 130bn euro ($170bn; ￡110bn) bailout from the EU and IMF to prevent it defaulting on its massive debts. The deal, which has not yet been finalised, could write off around half of Greece's privately-held debt.

The austerity measures were demanded by the European Union as a precondition for releasing the funds.

Greece now has two days to meet two other EU demands: setting out exactly how it will make 325m euros of the promised savings, and giving written confirmation that the measures will be implemented regardless of the outcome of April's election.

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European Union finance ministers are due to discuss their decision on the bailout package at a meeting on Wednesday.

Athens has been criticised for failing to implement many of the pledges it made in the first round of austerity measures, prompting concern from some EU politicians that the cuts might not be put into effect.

German Chancellor Angela Merkel hailed the vote as a "very important step" on the road to Greek stability, but insisted there "would not and cannot be any changes" to the austerity programme.

Mr Rehn meanwhile said the EU continued to stand by the Greek people, and insisted that the reforms were needed to ensure future economic growth.

"The Greek authorities and political forces should now take full ownership and make the case for the second programme and fully implement it in order to return the country to stable economic growth and job creation," he said.

The EU has been the target of much anger among Greeks, who see the reforms as piling unnecessary hardship on ordinary people.

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As ever, the biggest question mark of all - which was not a question at all for last night's rioters - is whether the Greek government is right in its assessment, that qualifying for sticking with the programme is still in the country's best interests ”

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Stephanie Flanders

Economics editor

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The measures include slashing 15,000 public-sector jobs as part of a longer-term strategy to get rid of 150,000 civil servants.

The minimum wage is also to be cut by 20% to about 600 euros a month, and labour laws are to be liberalised to allow easier hiring and firing of staff.

Financial markets were up slightly after the austerity bill was passed.

But tens of thousands protested against the measures in Athens on Sunday night.

Most of the demonstrators protested peacefully, but small groups were involved in running battles with riot police.

They did huge damage to the city, attacking buildings with petrol bombs, and setting fire to banks, cinemas and cafes.

In all, 45 buildings are said to have burnt in the worst rioting for years. Other businesses were looted and badly damaged.

Continue reading the main story What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.

Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.

The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.

Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.

There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.

The EU, IMF and European Central Bank agreed 229bn euros ($300bn; ￡190bn) of rescue loans for Greece. Prime Minister George Papandreou quit in November 2011 after trying to call a referendum.

Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.

Under Prime Minister Lucas Papademos, Greece is trying to negotiate a big write-off of private debts and secure a second bail-out of 130bn euros ($170bn, ￡80bn) before a 20 March deadline.

BACK 1 of 8 NEXT At least 170 people, most of them police officers, were hurt during the disturbances, and dozens of people were arrested.

Firefighters were still damping down some of the blazes on Monday.

Eurozone finance ministers will closely monitor the situation in Greece before making further decisions on the bailout package at Wednesday's meeting.

They rejected a previous set of measures proposed by Athens, demanding an extra 325m euros in savings.

Passing the austerity bill has cost Greece's coalition more than 40 MPs, who were dismissed after refusing to back the plan.

Several ministers have resigned, and a small right-wing party Laos, the junior member of the coalition, also withdrew its co-operation.