As 100,000 protesters turned out in Athens and Thessaloniki, the lawmakers approved another round of stringent budget measures requested by Greece's international creditors in return for a multibillion-euro rescue fund.
Greece Finance Minister Evangelos Venizelos told Parliament it had to back the Government-approved plan to unlock a 130 billion ($NZ207 billion) rescue fund from the European Union and the International Monetary Fund, or Greece would be forced to default.
The vote was taken on (the European) Sunday, to be in place before major markets in Europe and the United States opened on their Monday.
The Greek deputies were also asked to back a bond-swap agreement with private creditors which would wipe out about 100 billion from Greece's 350 billion debt, reducing the country's massive debt burden to 120% of gross domestic product (GDP).
The Greek Government must carry out the bond swap by Friday in order to have enough time to prevent a chaotic bankruptcy when Greece faces a wave of nearly 14.5 billion in maturing debt on March 14.
Mr Venizelos said if that did not happen, the country would be bankrupt.
Craigs Investment Partners broker Chris Timms said in an interview the announcement of the austerity measures' being approved was good news for markets, as it reduced uncertainty.
"Uncertainty rattles markets, but let's hope the package can be put in place without Greece turning into a full-blown riot."
Mr Timms said there was little sympathy for the situation Greece had found itself in.
While there could be some justification for blaming the Greek Government for the predicament, there was no-one else to blame but Greece itself.
"It's all very well people jumping up and down about the austerity measures but the fact is Greece overborrowed and now it has to pay the money back."
Greece had to find a way of reducing its spending while increasing its revenue, just as households did during the recent Global Financial Crisis.
The concern for investors centred on whether or not the latest package was the last Greece would have to adopt.
There was a general consensus that the worst was not yet over for Greece and that more money would be required from the EU or IMF, Mr Timms said.
The proposed measures are expected to heap more hardship on ordinary Greeks already suffering from the crisis.
They involve a 22% cut in the minimum wage, and 32% for workers under 25; deregulating the labour market to make it easier to lay off workers; and a package of tax and pension reforms.
Both New Zealand and Australian sharemarkets were up on the news of the deal. The New Zealand dollar was up mid-afternoon, while the Australian currency fell slightly.
Tokyo shares opened slightly higher after the deal but Hong Kong opened lower.
Gold was up 0.5% at $US1728 ($NZ2080) an ounce, boosted by the Greek vote, as the euro and equities recovered. Bullion fell on Friday, as uncertainty about Greece prompted investors to sell the metal and hoard cash.
Oil was up, with US March crude up 0.69% at $US99.35 a barrel, after snapping a three-day rise on Friday when sentiment was weighed by worries over Greece and a forecast by the International Energy Agency for lower oil demand growth this year.
Brent March crude futures fell $US1.28 to settle at $US117.31 a barrel after a string of eight straight gains.
With markets expected to remain nervous about the developments over the Greek bail-out, a slew of debt auctions scheduled this week by Italy, Spain and France will be watched closely as a gauge of investor confidence in the euro zone's high-yielding sovereign debts.
German Bunds rallied while yields rose on Italian and Spanish bonds on Friday.
Asian credit markets were slightly firmer early yesterday, with the spreads on the iTraxx Asia ex-Japan investment grade index narrowing by one basis point from Friday.
The European Union meets on Thursday (NZ time) to discuss giving a seal of approval for the new bail-out.
