Striking Greeks raged against a new wave of austerity on Wednesday after euro zone finance ministers failed to agree how to make private creditors contribute to a second bailout for their indebted country. As workers staged a national strike, thousands of protesters -- some chanting "Thieves, traitors! Where did the money go" -- massed at parliament to try to prevent lawmakers enacting more tax hikes, spending cuts and sell-offs of state property.
Socialist Prime Minister George Papandreou must push through a five-year deficit reduction and privatisation programme to continue receiving aid from the European Union and International Monetary Fund and avoid default after Greece fell behind on its first 110 billion euros (97.0 billion pounds) rescue plan.
In Brussels, finance ministers of the 17-nation single currency area debated late into the night how to make private bondholders share the cost of the second rescue in two years without triggering even worse turmoil in financial markets.
They are aiming for a deal at a European Union summit on June 23-24 and will meet again on Sunday evening in Luxembourg. However Tuesday's apparent impasse, and the absence of the usual news conference, sent the cost of insuring Greek debt against default rocketing to an all-time high.
Highlighting contagion risks from the Greek crisis, shares in top French banks tumbled after credit ratings agency Moody's said it might downgrade them because of their exposure to Greece's debt-stricken economy.
Greek bank stocks also fell by as much as 7 percent on growing political uncertainty.
The French government sought to deflect market pressure by noting -- perhaps pointedly in the light of differences between Paris and Berlin over the Greek bailout -- that German banks were actually more exposed.
"French banks are exposed to Greece... (but) they are less exposed than the German banking sector, for instance," Secretary of State for European Affairs Laurent Wauquiez said.
