ATHENS, Greece — Greece's prime minister, struggling to ensure parliamentary approval for a crucial austerity bill, said Wednesday he would reshuffle his Cabinet and seek a vote of confidence for his new government after coalition talks with opposition parties failed.
The negotiations collapsed as rioters clashed with police in Athens during a general strike and renewed fears of default rattled global markets.
Prime Minister George Papandreou has been struggling to contain an internal party revolt over a new austerity package that is the main condition for continued funding from a $155 billion international bailout. Without continued funding from the rescue loans, Greece will default on its massive debts — which would unsettle the global economy and undermine the future of the eurozone.
Police fired repeated volleys of tear gas to repel rioters hurling firebombs and ripped-up paving stones as an anti-austerity rally by tens of thousands of protesters degenerated into violence. A crowd of youths smashed the windows of a luxury hotel in the square. More than 60 people were injured, including 36 police, as clouds of choking gas wafted through central Athens. Bewildered tourists struggled through the mayhem.
Global stocks closed sharply lower as events in Greece — which has the worst sovereign credit rating in the world — destabilized markets. Major indexes had their biggest drop on Wednesday since June 1 and the euro slid more than 1 percent against the dollar.