Markets nervous over Greek austerity protests

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Markets nervous over Greek austerity protests

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Angry scenes in Athens are fuelling anxiety in the world’s financial markets amid fear of even worse unrest to come.

On Tuesday it was Greek transport workers who walked out to protest against spending cuts and tax hikes the government hopes will stop the country going bankrupt.

And unions representing around half of the country’s workforce are threatening a national strike next week.

Market fears that public anger will stop Athens following through with its debt repayment plan saw Greece’s debt rating downgraded to “junk.”

Finance Minister George Papaconstantinou told national television the downgrade was not a true reflection of the state of the economy and the talks that are going on to get Greece out of its debt crisis.

Greece’s “junk” debt rating has made borrowing even harder for a country that needs desperately to borrow. With Portugal’s debt also downgraded yesterday, there’s real concern it may be dragged down with Greece. Similar worries exist over Spain and with the crisis threatening to undermine the euro currency, borrowing could become harder for all eurozone governments.