Greek credit rating slashed to below Egypt's

The cut places Greece's credit rating below that of Egypt, currently involved in the uncertainty of its ongoing revolutionary process.

It is also the second downgrade for Portugal by S&P in a week.

S&P said that the cuts were required as a result of fresh concerns that investors could be hit by some form of restructuring under the European Union's new permanent bail-out fund, due to kick in from 2013.

Yields on Greek 10-year bonds climbed sharply to 12.568 percent, up from 12.499 percent, while Portugal saw its yield increase from 7.818 percent to 7.881 percent.

Greek Prime Minister George Papandreou reacted angrily to the move.

"We have seen the ratings agencies go from the bubble of euphoria to the panic of risk," he said after a gathering of MEPs from the Socialists and Democrats group in the European Parliament who were meeting in the Greek capital.

"Only two years ago they were rating AAA all the toxic bonds that created the crisis," he continued, reports local conservative daily Kathimerini.

Portuguese caretaker leader Jose Socrates for his part said he was determined not to request a bail-out from the IMF and EU. "The government doesn't have any intention of doing that. We are very determined that that doesn't happen," he said.

Meanwhile, civil unrest in Greece appears to be returning along with the spring weather.

On Tuesday hundreds of residents of the town of Keratea, near the capital, who are opposed to the construction of a landfill site, fought pitched battles with riot police after authorities attempted to remove barricades from the roads. Police fired repeated rounds of tear gas at residents hurling firebombs and rocks.

Residents have been protesting the landfill site for three months, and according to reports, resistance has spread to the nearby town of Laurio, who ran to defend the barricades as well. Air-raid sirens and church bells rang out in both towns urging citizens to join the protests.

On Wednesday, doctors and nurses are scheduled to start a two-day strike against nationally imposed cuts and primary and secondary school teachers are also walking out over complaints of the closure or merger of some 1000 schools. Some schools also face occupation by campaigners.

Teachers, students and parents are to march on the parliament at midday.

In another instance of what the right is calling Greece's 'ungovernability', in Athens on Monday the occupation of the town hall by temporary workers angry at their precarious contracts entered its second week. Similar protests have spread to four other town halls.

Representatives of the troika of the European Commission, the European Central Bank and the International Monetary Fund are due back in the Greek capital next week to give an assessment of the country's austerity measures.

Air raid sirens in Keratea