The Greek and European Union flags.
The Greek and European Union flags. - 
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Tess Vigeland: The euro fell to its lowest level in a year today. The recent news of a debt rescue package for Greece didn't ease fears of financial contagion throughout the eurozone and beyond. Spain was the main focus of today's worries. Rumors swirled that the Spanish government had asked the International Monetary Fund for a $400 billion bailout. The IMF denies it, and the Spanish government said the rumor was "madness."

We asked our European correspondent Stephen Beard to try to make some sense of today's mayhem.

STEPHEN BEARD: The fear of a European government defaulting does on the face of it seem insane. After all, the EU and the IMF have just put together the biggest bailout in history for Europe's most heavily indebted nation, Greece.

Howard Wheeldon of BGC Brokers says the trouble is the markets aren't buying it.

HOWARD WHEELDON: Markets are simply saying: We don't trust this solution. We don't think it's enough, and quite frankly we don't trust the Greek government to actually carry out its part of the bargain.

The government in Athens promised deep cuts in public spending. Today Greek public sector workers delivered their considered response. They launched a 48-hour strike, clashed with riot police, and stormed the Acropolis.

Analyst Justin Urquart Stewart says deficit cutting isn't easy.

Justin Urquart STEWART: It's going to be very painful. And so there will be tears before bedtime, or more to the point, there will be tear gas before bedtime as you're going to see further riots and disturbances. Not just in Greece but, I suspect, elsewhere as well.

Portugal and Spain -- two other heavily indebted members of the eurozone -- also got a market hammering today. And with the EU appearing powerless to help its members, the euro dropped to its lowest level against the dollar in a year.

Treacherous territory, says Wheeldon.

WHEELDON: This situation is in danger of winding itself out of control.

Greece, Portugal and Spain have one consolation: If this week's election in Britain is inconclusive as expected, the U.K. may draw the speculators' fire. Britain and its currency could take a beating instead.

In London, this is Stephen Beard for Marketplace.