THESSALONIKI (Greece), Sept 10: Riot police fired tear gas on Saturday to disperse anti-austerity protesters marching in Greece’s second-largest city ahead of the prime minister’s annual speech on the economy.

From taxi drivers to sports fans, more than 17,000 angry citizens were protesting in the northern port of Thessaloniki. Police said they were attacked with flare guns, stones, sticks and even a petrol bomb, and they arrested two people while detaining another 94.

Prime Minister George Papandreou's Socialist government has imposed painful austerity measures — cutting pensions and salaries while raising taxes and retirement ages — to secure vital international rescue loans worth (euro) 219 billion ($302.6 billion). But its efforts to economize while reviving a fast-contracting economy amid record unemployment have faltered, sparking new market distress. On Friday, Finance Minister Evangelos Venizelos was forced to deny rumours of impending bankruptcy over the weekend.

The default rumours, combined with the sudden resignation of senior European Central Bank official Juergen Stark, created fresh market fears that sent yields on Greek 10-year bonds surging to 21 per cent. Greece has the worst credit rating in the world, just shy of default.

In Thessaloniki on Saturday, several thousand taxi drivers protesting new licensing reforms launched a chain of separate marches, chanting anti-government slogans.—AP