Three people were killed in a fire set by protesters today during a march against government austerity measures in central Athens, officials said.
Tens of thousands of Greeks took to the streets of the capital and masked youths clashed with police in riot gear, who responded with rounds of tear gas and flash bombs which clouded the blocks surrounding parliament.
The violence is a blow to prime minister George Papandreou's plans to push through tough budget cuts demanded by the European Union and International Monetary Fund in exchange for a €110 billion aid package unveiled on Sunday.
Officials said a female and two male employees of a Marfin Egnatia Bank branch died of asphyxiation after protesters tossed petrol bombs into a building on central Stadiou Avenue. Firemen had to restrain an elderly woman outside the bank, who wept and cried "my child, my child".
Mr Papandreou, speaking in parliament, expressed shock at the deaths and vowed to bring those responsible to justice. "We are deeply shocked by the unjust death of these three people, our fellow citizens, who were victims of a murderous act," he said.
But he also defended his austerity plans, which foresee €30 billion in savings mainly from cuts in wages and pensions, and said the government would not abandon its drive to save the country from ruin. "We took these decisions to save the country," he said. "The alternative would be bankruptcy."
European leaders warned today that the euro zone debt crisis could spread like a bushfire beyond Greece, and investors sold stocks and the euro.
France declared the euro was under speculative attack but said it would fail, while the Greek government promised not to retreat a single step despite violence on the streets of Athens, saying it was prepared to pay a heavy political price.
A general strike shut down Greek airports, tourist sites and public services and about 50,000 demonstrators marched against the planned public spending cuts and tax rises, demanding that tax cheats and corrupt politicians be put on trial.
Hundreds of protesters threw stones and bottles at police who responded with tear gas in easily the biggest demonstration since prime minister George Papandreou took office last October.
In Berlin, German chancellor Angela Merkel said Europe's fate was at stake in the most serious crisis of the common currency's 11-year life, and other euro zone countries could be hit unless the rescue for Greece succeeds.
European monetary affairs commissioner Olli Rehn said the crisis must not spread. "It's absolutely essential to contain the bushfire in Greece so that it will not become a forest fire and a threat to financial stability for the European Union and its economy as a whole," he told a news conference.
Anxiety that the crisis may spread sent stocks tumbling worldwide, and the euro hit a 14-month low below $1.29, leaving it down 3.5 per cent against the dollar this week alone.
French prime minister Francois Fillon said the common currency was under attack from financial speculators.
"This is not an attack on Greece but on the euro, and it will fail, for two reasons. Firstly, because the euro zone is solid ... and then because we have demonstrated solid solidarity in favour of Greece," he told TF1 television.
In a sign of alarm in Brussels, European Commission president Jose Manuel Barroso also attacked financial "speculators", saying the EU executive could move quickly to regulate them further if they acted irresponsibly.
Ms Merkel, whose foot-dragging many analysts have blamed for aggravating the Greek crisis, told parliament the success of the rescue package would determine "nothing less than the future of Europe -- and with it the future of Germany in Europe".
Without the aid, a chain reaction threatened to destabilise the European and international financial system, she said in a debate on approving Berlin's €22 billion contribution to the emergency loans for Athens, despite German public hostility.
Battered Greek bank shares shed a further 5 per cent on news of the deaths, which follow three months of sporadic strikes and street protests.
Shares in Spain and Portugal, seen as the next two targets for investors testing the European Union's will and ability to defend weak euro zone economies, fell for a second day. Lisbon had to pay more than four times its previous yield to sell six-month treasury bills today.
The euro hit a 14-month low of $1.2801 and the cost of insuring Spanish and Portuguese debt against default spiked to euro lifetime highs.
Seeking to calm markets, Mr Rehn said Spain did not need an aid mechanism of the kind created for Greece and he was not going to propose one. But he also said the deficit levels of all EU states were "worryingly high".
Despite official denials, many economists are convinced Greece will have to restructure its debt, making private investors take a share of the pain.
Concern that the Greek government will be unable to make all the budget cuts agreed with the EU and IMF because of social unrest is one of the drivers of the euro zone turmoil.
Mr Papandreou presented an austerity bill to parliament yesterday which foresees €30 billion in new savings. It is expected to pass, but the conservative opposition vowed to vote against it, dooming hopes of a political consensus.
Analysts were watching today's protest for pointers to the degree of mobilisation of Greece's powerful trade unions.
So far, demonstrations have been limited to tens of thousands but anger is mounting, with opinion polls showing ordinary Greeks believe they are paying the price of the crisis while tax evasion and corruption go unpunished.
"With our strike today we are continuing our fight against harsh and unfair measures that hit workers, pensioners and the unemployed," said Yannios Panagopoulos, president of private sector union GSEE.
Reuters