Greek Anti-Cuts Rally Marred By Violence

Violence has erupted in Athens as a national two-day strike began and the Greek parliament was asked to adopt further austerity measures.

Police fired tear gas and stun grenades after clashing with protesters, who hurled bottles, rocks and petrol bombs at the officers.

Amid a throng of gas-masked demonstrators, a satellite TV truck was set on fire along with outdoor cafe umbrellas and shop windows were smashed.

Reports said hooded youths also ripped up paving stones and set rubbish bins ablaze.

The skirmishes came as MPs were asked to help pass tough proposals demanded by the EU and the International Monetary Fund (IMF) in order to receive another bailout.

As the national 48-hour strike got under way, up to 20,000 people had earlier marched peacefully through the city.

Some 5,000 police were deployed around Athens as demonstrators gathered outside parliament, chanting anti-austerity slogans.

Doctors, casino staff, theatre actors and air traffic controllers were just some of the workers who have joined the walkout.

The Greek parliament needs to agree to 28bn euros (£25bn) of spending cuts and economic reforms by the end of this month.

Only then will European finance ministers give the country 12bn euros (£10.7bn) - the fifth and final instalment of the original 110bn euros (£98bn) bailout agreed in May last year.

Greece needs the loan to pay next month's bills and without it, the country will default by July 15.

Speaking on Monday, Greek prime minister George Papandreou urged MPs to fulfil a "patriotic duty" by voting in favour of the new austerity measures.

But an MP from the country's ruling party has told Sky News he intends to vote against the tough economic programme unless concessions are made.

Furthermore, unions say the measures merely slap taxes on minimum wage earners.

Greece's finances have spiralled out of control partly due to the country's employment laws.

The average retirement age is 61, but millions of workers in the public and private sector retire at 50.

This has left Greece with a hefty and ever-increasing pension liability.

While paying out generous state pensions, the Greek government has failed to generate incomes to match.

Tax evasion is widespread, with only 5,000 Greeks admitting to earning wages over 100,000 euros (£89,000) a year.

With self-reported earnings that are rarely challenged and a tax inspection system under pressure from spending cuts, up to £13bn in tax may be lost every year.

Meanwhile, the governor of the Bank of England Sir Mervyn King has said concerns over Greece defaulting are sufficient enough to have prompted the consideration of contingency plans for the UK banking sector.

He also repeated to the Treasury Select Committee that it was unclear how exposed UK banks are to Greece due to a complicated web of loans to other European institutions.

There is a danger that regardless of the UK's exposure level, a Greek default would prompt a worldwide tightening of lending from markets to banks that would impact the UK, he added.