ATHENS, Greece -- Greek hospitals, airports and schools were shut and police scuffled with protesters Thursday, as unions staged the second general strike this year against government budget cuts to curb the European Union's biggest deficit.

Greek bonds declined and stocks fell, as the strike disrupted public services and forced the cancelation of all 479 flights from Athens International Airport. Bus and subway drivers, doctors, journalists and teachers walked off the jobs to protest $6.5 billion of wage cuts and tax increases announced March 3 by Prime Minister George Papandreou.

"The measures taken so far are unjust, demanding sacrifices from workers that aren't being demanded from the employers, businessmen and bankers that created this crisis," said Stathis Anestis, spokesman for the GSEE union. The union said 90 percent of its 2 million members adhered to the strike.

The government's latest budget cuts, the third package of measures this year, has triggered a new wave of protests in Greece, while being praised by EU officials and rewarded by investors.

The main union rallies Thursday were peaceful, though riot police in Athens fired tear gas at masked protesters with anarchist flags who damaged department stores and hotels and hurled marble slabs at police.

Bonds fell, with the yield on the two-year note rising 24 basis points to 5.06 percent. The Athens benchmark general index, which had gained 6 percent since the measures were announced March 3, declined 0.7 percent Thursday.

Thursday's strike is the latest protest against the austerity measures. On March 5, striking workers shut down transport and tried to storm parliament, as lawmakers passed the new budget cuts that Finance Minister George Papaconstantinou said will show EU allies and investors that Greece is making good on its deficit pledges.

"The main risk is not that adjustment in Greece is not feasible, but that Greek society will refuse to shoulder the inevitable near-term economic pain," Deutsche Bank analysts including Thomas Mayer wrote in a research note.

The tax increases and wage cuts are likely to be a further drag on growth this year, complicating the government's efforts to reduce the deficit as percent of gross domestic product. Deutsche Bank forecasts a contraction of 4 percent in 2010, twice last year's pace. The Finance Ministry said Wednesday that the forecast for a 0.3 percent contraction included in the January deficit-reduction plan is too optimistic, and it now sees the economy shrinking at least 0.8 percent this year.

Mr. Papandreou's approval rating slipped more than 10 percentage points over the last two months, as he unveiled the raft of budget measures, a poll showed March 9. He still commands the support of a majority of Greeks, with 52 percent having a positive opinion of him, according to the survey by GPO pollsters for Mega Television.

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