Greek prime minister George Papandreou has vowed to push through draconian economic measures demanded as part of a €110bn rescue package for his debt-burdened country despite the death of three people during demonstrations

Three Athens bank employees died on Wednesday in a blaze started by a petrol bomb thrown as the city erupted into violence during a march by tens of thousands of striking workers angry at deep spending cuts.

George Papandreou, Greek prime minister, called the deaths of the two women and one man who became trapped in the branch “a murderous act”.

He said he would not be deterred from pushing through unpopular public spending cuts and tax rises demanded as part of the €110bn rescue package agreed with Greece’s eurozone neighbours and the International Monetary Fund.

The fire broke out in a branch of Marfin Popular Bank. Officials said the three employees died of asphyxiation. Firemen rescued several other workers.

The attack came amid escalating anger over a new round of austerity measures launched by the socialist government in return for emergency loans to tackle Greece’s debt crisis.

Mr Papandreou told parliament: “We were all deeply shocked by the unjust deaths of these three workers who became victims today of a murderous act …This is where uncontrolled violence and political irresponsibility leads us.”

But he said the government would not be swayed from its plan to try to bring the public finances under control. “We took these measures to save jobs, protect families, households and workers,” he said.

The deaths were the first in five months of regular street protests against the government’s austerity programme. A spokesman for ADEDY, one of the unions organising the march to parliament, said he regretted the deaths but that the protests would continue.

Greek police fired teargas and stun grenades at demonstrators who tried to force their way into parliament ahead of a debate on the three-year programme. Angry protestors outside the parliament building raised clenched fists and shouted “Thieves, thieves” - an expression for corrupt politicians.

The clashes erupted after the government announced further cuts in bonuses and allowances for about 600,000 public sector workers and an increase in value-added tax. The strike grounded flights in and out of Athens international airport and shut public transport.

The protests led to further falls in European financial markets. Investors worried that the unrest could undermine the government’s determination to see through reform. Stock and bond markets in Greece, Portugal and Spain fell. The euro slipped to a 14-month low against the dollar.

European authorities warned the behaviour of markets in the crisis was threatening Europe’s democratic institutions and vowed to impose tough regulations to protect Europe from attack.

José Manuel Barroso, European Commission president, said he would propose placing credit ratings agencies under the supervision of a European securities markets authority.

“We are all familiar with the expression ‘markets are testing this, markets are testing that’,” he said. “Well, they are also testing regulatory authorities and democratic institutions. They must know that all of this is ultimately a test for themselves.”

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