Shock waves from a crisis in a relatively small European economy spread far beyond the continent, with Wall Street falling and the Federal Reserve expressing concern about potential consequences for the US economy itself.

On the markets, the euro slid against the dollar and tumbled against the yen after the ECB President Jean-Claude Trichet failed to offer any new measures to ease Greece's debt crisis, while stock prices tumbled around the world.

In Athens, Parliament approved the government's 30 billion euro ($40 billion) austerity bill, imposing years of hard measures in return for a 110 billion euro ($147.6 billion) rescue by the European Union and International Monetary Fund.

"This is the time for change. There is not a single day or hour to lose," Socialist Prime Minister George Papandreou said.

But he had to expel three Socialist deputies who abstained in a preliminary vote rather than backing their government.

The defections were a first sign of the problems Papandreou faces within his own party in applying the harsh measures needed to pull Greece out of a crisis shaking international markets.

As the vote took place, a crowd of around 10,000 protesting students, workers and pensioners converged on Parliament to voice their opposition to the bill, chanting "Take to the streets! Say 'No' to the measures that hurt the Greek people!" On Wednesday, in the biggest and most violent protest since riots shook the country in 2008, some 50,000 Greeks marched in Athens and clashed with police in pitched street battles. A petrol bomb attack killed three workers in a local bank branch.

Germany, the biggest European contributor to the bailout for Athens, faces parliamentary votes on Friday. The Bundestag lower house of Parliament is due to start debating a draft law on the German contribution at 0700 GMT.

The debate is due to last two hours, after which lawmakers will vote. The upper house is scheduled to vote on the bill soon afterward. Both houses are expected to give their approval.

On the markets, MSCI's all-country world stock index tumbled 1.5 percent to 291.81, its lowest since March 2.

The Dow Jones Industrial Average fell 142.91 points, or 1.31 percent, to 10,725.21. The Standard & Poor's 500 Index dropped 19.21 points, or 1.65 percent, to 1,146.69. The Nasdaq Composite Index shed 44.94 points, or 1.87 percent, to 2,357.35.

Europe's FTSEurofirst 300 index sank 1.64 percent to 1,006.66, with its fall softened as BNP Paribas beat expectations on first-quarter profit.

Japan's Nikkei slumped 3.3 percent, catching up with other bourses after a three-day holiday.

"There's no let-up in concerns that the euro zone debt crisis could continue to worsen and as a result equity markets across the globe remain under pressure," said Ben Potter, analyst at IG Markets.

ECB chief Trichet proved a big disappointment when he said a meeting of the bank's Governing Council in Lisbon had not discussed buying bonds to combat the crisis.

Trichet reiterated the ECB's backing for Greece's savings plans and dismissed the prospect of any euro zone member defaulting on debt. "Default is, for me, out of the question," he said.

In reaction, the euro tumbled to a 14-month low of $1.2652. The U.S. Dollar Index climbed 0.51 percent to 84.51. Against the Japanese yen, the dollar fell 1.34 percent to

92.61.

"Nothing short of a sensational announcement can help the euro at this point. And that certainly did not come from Trichet," said Kathy Lien, a director for currency research at GFT Forex, in New York.

Policymakers' attempts to talk down the risk of contagion and scare off "speculators" had little impact on traders unimpressed by the slow EU response to the crisis.

Yield spreads widened for weaker euro zone countries at risk of being sucked into the debt crisis as investors headed for the greater safety of German government debt. Portuguese, Spanish and even Italian bonds were affected.

In a globalized economy, problems spread fast and the euro zone's troubles provoked worries far afield.

US central bankers said the Federal Reserve was closely monitoring the financial turbulence in Europe as it could have repercussions for the United States and its markets.