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Samaras then led his lawmakers in a dramatic walkout of the debate, without indicating whether he would vote in favor of the deal.

The drama in Greece sent immediate ripples throughout Europe. Premier Silvio Berlusconi’s government in Italy was teetering as well Thursday after it failed to come up with a credible plan to deal with its dangerously high debts, and Portugal demanded more flexible terms for its own bailout. The European Central Bank made a surprise decision to cut interest rates by a quarter of a percentage point, to 1.25 percent, in an acknowledgment of the fragility of the continent’s finances.

Talk of Greece also dominated the G-20 summit in the French resort of Cannes, where the leaders of the world’s economic powerhouses gathered to solve Europe’s debt crisis, which threatens to push the world back into recession.

During a summit break, French President Nicolas Sarkozy praised the Greek opposition’s backing for the debt-crippled country’s new bailout as “courageous and responsible.”

Greece‘s new debt deal would give the country an extra €130 billion ($179 billion) in rescue loans from the rest of the eurozone and the International Monetary Fund — on top of the €110 billion ($152 billion) it was granted a year ago. It would also see banks forgive Athens 50 percent of the money it still owes them. The goal is to reduce Greece‘s massive debts to the point where the country is able to handle its finances without constant bailouts.

Polls indicate the Greek public is close to the breaking point after more than 20 months of harsh austerity cuts and tax hikes. Recent opinion surveys show 90 percent opposing Papandreou’s policies and his party polling just 20 percent public support.

Underlining that point, 300 people held a peaceful anti-austerity protest in central Athens late Thursday

The political drama continues Friday, when parliament will hold a confidence vote on the government. Papandreou’s majority has been reduced to the bare minimum 151 after Socialist lawmaker Eva Kaili said she would not vote in favor.

“Tomorrow’s vote is of particular significance, for the confidence vote provides a guarantee of how we will make our new steps … and how we will talk with the opposition parties,” Papandreou said.

The omens are poor: The two other European governments besides Greece that have received bailouts — Portugal and Ireland — have seen their governments fall during the economic turmoil.

Associated Press writers Derek Gatopoulos and Demetris Nellas in Athens, Colleen Barry in Milan, Jamey Keaten in Cannes and Geir Moulson in Berlin contributed to this report.