'Can't they see we're already bankrupt? We have nothing more to give'

Greece's membership to the euro – and perhaps the entire eurozone– hung by a thread as the birthplace of democracy was rocked by another day of demonstrations and political fallout while failing to get its finances in order.

The situation took a dramatic turn for the worse here yesterday as scores of politicians rejected a new round of austerity measures imposed by Athens' international backers – a condition of receiving vital bailout funds to meet the demands of international creditors.

There was bedlam on the streets of the capital as unions began a two-day general strike and the far-right party quit the unity government over the new cuts.

Thousands of protesters that assembled outside Parliament scattered after clashes broke out between groups of youths and riot police. Young men covering their faces with masks and scarves threw Molotov cocktails at the riot police who retaliated with tear gas. At least three people were injured and authorities reported six arrests. Leaders from the country's largest police union, which is staging a work-to-rule action, also participated in yesterday's demonstration, further stretching the government's increasingly scarce resources.

The Federation of Police Workers has called for the arrest of officials from the European Union, European Central Bank and International Monetary Fund who are currently in Athens and delivered the letters at their hotel. "Authorities should issue arrest warrants [for Troika officials] for having violated a number of Greek laws, including blackmail, the reduction of our democratic institutions and sovereignty," Christos Fotopoulos, from the union, told The Independent. "If this situation goes on, we fear it'll have uncontrollable consequences, where brother kills brother. The police can't fill what has become a political void."

More than 60 rallies were staged throughout the country and thousands of protesters marched to parliament in Athens to vent their indignation at the premier's harsh plans to secure a second bailout for the country. Public transport drivers walked off the job, ships were docked while hospitals operated with only skeleton staffs and schools closed.

Bank employees, doctors and dockworkers were among the demonstrators that chanted anti-austerity slogans and held banners that said: "Down with the government and the parties that support the plutocracy."

"Can't they see we're already bankrupt? We have nothing more to give," Marina Katsoula, 42, who has two children, said. Police said some 7,000 people took part in the demonstration. Another 10,000 Communist supporters held a separate, peaceful march.

Scores of youths, in hoods and gas masks, used sledge hammers to smash up marble paving stones in Athens' main Syntagma Square before hurling the rubble at riot police. Speaking to MPs, Greece's Deputy Prime Minister Theodoros Pangalos, said: "We are experiencing tragic moments." But EU Commission President Jose Manuel Barroso said he thought a deal could still be struck.