• Demonstrators scuffle with riot police outside the Finance Ministry during a demonstration over government cuts in central Athens yesterday. Picture: Getty Images
The EU's statistics agency, Eurostat, said the country's budget deficit in 2009 stood at 13.6 per cent of gross domestic product rather than the previously predicted 12.9 per cent, and could be further revised by up to 0.5 percentage points.
The level is more than four times the EU limit set for the 16 countries that use the euro currency, which has been badly hit by the Greek financial crisis.
The EU's revision came as the civil servants' strike disrupted public services, shut down schools and left state hospitals working with emergency staff. Protesters from a Communist-backed trade union blockaded Athens' main port of Piraeus, disrupting ferry services.
But demonstrations in Athens were far smaller than those of other recent strikes, with only 3,000-4,000 protesters marching through the city centre.
Scuffles broke out when a group of about 150 demonstrators challenged police lines near the city's central Syntagma Square. Police responded with small amounts of tear gas.
Further bad news emerged as ratings agency Moody's Investor Services downgraded its rating on Greece's debt and warned that further downgrades were a distinct possibility.
Moody's downgrade was likely to make it even more difficult for the cash-strapped Greek government to tap the bond markets for money.
The government has insisted it prefers to access money via the markets to meet its borrowing requirements instead of resorting to a joint eurozone-International Monetary Fund rescue package.
"Greece is in the midst of another hellish week and now faces no choice but to seek to formally activate the European rescue package," said Ben May, European economist at Capital Economics.
Prime minister George Papandreou said his country was going through an "unprecedented crisis, the likes of which no other government has faced in the past".
He added that the government's duty "is to take every decision which prevents the worst for Greeks, every decision which solves problems that for decades we preferred not to touch, every decision which serves the national interest".
The Greek finance ministry insisted its target of reducing its deficit by at least four percentage points in 2010 remained unchanged.
Eurostat also revised the ratio of government debt to GDP to 115.1 per cent, up from 113.4 and the second highest in the EU after Italy.
News of Eurostat's revisions sent Greece's borrowing costs skyrocketing to alarming levels.
The interest rate gap between Greek ten-year bonds and German ones – considered a benchmark of stability – widened to a record 5.67 percentage points minutes after the announcement, from 5.03 percentage points earlier in the day.
Earlier this week, the Greek government began talks with the IMF, the European Central Bank and the European Commission to hammer out details for the three-year rescue package.
Struggling to cope with a debt pile of 300 billion (259.8bn), Greece needs to borrow about54 billion this year alone, with about 10 billion of that next month.
Greece is not the only eurozone country facing financial problems, HSBC warned in a note to investors yesterday.
It added: "Saving Greece via the EU/IMF aid package may not stop the market from assessing that other countries may encounter similar difficulties in tapping capital markets and servicing their debt going forward."