Greece
Protesters raises their hands in front of the parliament, during a rally against austerity economic measures and corruption in Athens' Constitution square

Greece has been pushed ever closer to the harsh reality of default after Wednesday's general strike all but shut the country down. The strikes have closed schools, central and local government offices around the country, while hospitals were operating on skeleton staff. Port and public transport services were disrupted, while a walkout by journalists forced most morning news programming off the air.

After Monday's announcement that Greece had its credit rating slashed by three notches from B to CCC, the prospect of Greece falling further through the trap door is looking even more likely. Tens of thousands of protesters have marched on the country's Parliament shouting 'thieves, traitors whilst mocking the Government with chants of 'where did the all the money go?' The general strike has been launched against government efforts to approve national austerity measures.

Greek Prime Minster Mr. Papandreou is attempting to push through a new five year campaign of tax hikes, spending cuts and sell offs of state property to continue receiving aid from the European Union and the IMF. Both organisations have raised doubt as to whether continuing the aid programmes can be met if such measures are not passed through the Greek government.

Doubts have been raised today as to whether the measures will indeed pass through Parliament. After the defection of one PASOK deputy it leaves the Prime Minsters plans in a perilous situation. Conservative opposition MP's have been campaigning hard to block any further austerity measures and reports today claim that some members of the Prime Minsters socialist government are set to reject the plans. With the ruling party only holding 155 of the 300 seats there are now real concerns that the measures will pass through the Greek Parliament, leaving both the country and embattled Prime Minster Papandreou in serious crisis.

Tuesday's meeting in Brussels between Eurozone finance ministers will do nothing to ease fears of a Greek default. Eurozone minsters have failed to reach an agreement on how private holders of Greek debt should share the cost of any new bail out of the Greek economy. The bailout package which is an estimated £150 billion is opposed by the European Central Bank. If the Eurozone members can't negotiate a deal and the Greek austerity measures fall through, the consequences could be catastrophic for its people.

Shares in Greek banks fell seven per cent after the news that Greece's credit rating had fallen three notches to CCC and the political uncertainty is worrying investors. With general strikes and political infighting rife in Greece a plan to help rebuild the economy could be lost. Analysts believe that whilst the Greek government may survive in the short term, the longer terms damage could topple the socialist government.