Greek austerity measures prompt strike

Athens, Greece (CNN) -- Greek civil servants and private sector workers will hold a 24-hour strike May 5 to protest government austerity measures, the unions announced Wednesday.

The civil servants' union ADEDY and the General Confederation of Greek Labor (GSEE) announced the general strike. Together, the unions represent about 2.5 million workers, half of Greece's workforce.

The walkout will be their third joint strike against the government's deficit-cutting plans since the beginning of the year.

Many in Greece fear social unrest when the new austerity measures are announced, which is widely expected to happen before May 5.

Greece has started slashing spending and has implemented the austerity measures as a way to reduce its massive deficit. Its national debt of 300 billion euros ($394 billion) is bigger than the country's economy, and some estimates predict it will reach 120 percent of gross domestic product in 2010.

The country's deficit -- how much more it spends than it takes in -- is 12.7 percent.

Standard & Poor's downgraded Greece's debt rating to junk status Tuesday, meaning the country will now be viewed as a financial black hole by foreign investors.

Q&A: What does Greece's debt rating downgrade mean

The debt levels exceed limits set by the European Central Bank.

Greece is already in major breach of eurozone rules on deficit management and with S&P's downgrading, which reflects badly on the credibility of the euro.

Greece crisis deepens on global market sell-off

The junk downgrade of Greece's sovereign debt came as a planned bailout by European nations and the International Monetary Fund faced increasing opposition in Germany -- the largest economy of the 16 nations united under the euro currency.

Q&A: What does Greece's debt rating downgrade mean

The euro dropped to its lowest level in nearly a year in Wednesday trading in Asia, where it fell to as low as $1.31.

The junk rating now makes it much more difficult and expensive for Greece to try to raise money and debt in world markets. Standard & Poor 's also reduced the debt credit rating of Portugal, heightening fears of a "Greek contagion" that could spread to other European nations.