Global markets are suffering in the wake of Greece’s economic crisis.

As Germany’s parliament votes on the multi-million euro bail-out for troubled Greece, markets across the globe suffer, with the Dow Jones slumping 9% yesterday (6 May).

Concerns for the recovery of the global economy have been triggered by the debt crisis in Greece – which has a national debt of about 115% of GDP and is expected to rise to 149% by 2013 before falling.

Yesterday saw heavy falls in US markets, with Wall Street suffering its biggest intraday stock market collapse since Black Monday in 1987, although the Dow Jones bounced back up to finish 3.2% down at the end of the day’s trading.

Today, European markets dropped in early trading, with France’s Cac 40 and Germany’s Dax indexes down about 1%.

Asia has been particularly hit, with Japan’s Nikkei index shedding 3.1%, having fallen by 4.1% in morning trading; South Korea’s Kospi dropped by 2.2%; while China’s Shanghai index fell 1.9%. Shares in Hong Kong, Taiwan and Singapore also fell and Australia’s main index lost 2%.

As the UK faces a hung parliament after results of the general election come through, the pound has also fallen against the dollar and the euro – falling 2% against the dollar to $1.4639 and 1.6% against the euro (€1.1551).

Eurozone members and the International Monetary Fund (IMF) have agreed a €110 billion (£95bn; $146.2bn) three-year bail-out package to rescue Greece’s economy, and on Thursday, Greek MPs approved drastic spending cuts in exchange for an international financial rescue plan.

These spending cuts have been met with increasingly violent protests in Athens, with active and retired public sector workers bearing the brunt of the new wave of budget cuts.

Greek Prime Minister, George Papandreou, said: “Our national red line is to avoid bankruptcy”, and that the austerity cuts would involve “great sacrifices”.

The austerity plan aims to achieve fresh budget cuts of €30bn over three years. Measures to achieve this include:

• Scrapping bonus payments for public sector workers
• Capping annual holiday bonuses and axing them for higher earners
• Banning increases in public sector salaries and pensions for at least three years
• Increasing VAT from 21% to 23%
• Raising taxes on fuel, alcohol and tobacco by 10%
• Taxing illegal construction

At the time of writing, Germany’s lower house of parliament, the Bundestag, has voted to approve a €22.4bn (£19bn) bail-out plan, despite widespread public opposition.

The bill was passed by 390 votes to 72, with 139 abstentions. The upper house, the Bundesrat, will now vote on the bill. If approved, it will be signed into law by President Horst Koehler.

Chancellor Angela Merkel has defended her plan, saying the EU was at stake. She had warned that if the 27 member states did not work together on such crises, “the markets will think we’re unable to act”, according to the BBC.