Protests paralyze Greece amid growing worries

With riots and fires in Athens, strikes called by unions to protest austerity measures rocked Greece Wednesday, further heightening markets' worries of debt stagnation across Europe.

Despite Prime Minister George Papandreou's insistence that the austerity measures are vital for the nation's survival, the country's unions flexed their muscles by paralyzing public transport, grounding air traffic and preventing ferries from leaving docks.

After rallying in two separate demonstrations in central Athens, around 20,000 members of the major unions began converging on parliament, where the government was preparing for the measures to be voted Thursday.

Youths smashed store windows and bus stop shelters with iron bars with no sign of police before joining marches of demonstrators converging on parliament to protest draconian spending cuts and tax hikes.

Youths and police clashed in front of the Greek parliament with officers firing tear gas at protesters angry at the government's austerity drive.

According to police and firefighters, three people were killed in a firebomb attack on a bank in central Athens and around 20 people were being evacuated from the building, after hooded youths hurled petrol bombs at it.

Athens police were put on a "general state of alert" Wednesday to deal with the upgrading clashes.

As well as the violence in the capital Athens, rioting also broke out in the second city of Thessaloniki, where youths pelted stores with rocks and other makeshift missiles.

With most markets hammered by fears over a contagion of the Greek debt crisis, the euro slumped below $1.29 Wednesday - its lowest level in more than a year.

International Monetary Fund (IMF) chief Dominique Strauss-Kahn, when speaking in comments to the French daily Le Parisien published Wednesday, said nations must remain "extremely vigilant" on the contagion risk.

Portugal, Spain and Ireland have been under pressure over huge public deficits that have fueled growing concerns that the Greek debt debacle could spread to those countries.

Spain will "strictly respect" its deficit reduction plan, the country's prime minister vowed Wednesday, one day after dismissing as "absolute madness" rumors that Madrid would ask for a 280-billion-euro ($364-billion) bailout from the IMF.

Portugal, despite its success in raising 500 million euros ($646 million) on the bond market Wednesday, had to pay a much higher price.

On the eve of the British general election, the EU also warned that the next govern-ment of Britain, which, according to the latest EU forecast, is seen as having the highest public deficit levels in Europe, must focus first on tackling the rising debt.

Source: Global Times