Europe struggled yesterday to shake off doubts that it can emerge from its debt crisis as jitters returned to world markets despite the creation of a giant financial safety net to shore up the euro.

A day after an EU-IMF one trillion dollar support scheme sparked market euphoria, shares in the US, Asia and Europe fell and the euro faltered amid worries that Greece and other debt-burdened countries will not carry out tough austerity measures.

In Athens, the epicentre of the crisis, the Greek government asked the EU and International Monetary Fund for a first tranche of €20 billion from a €110-billion bailout package to help it make debt payments this month, a finance ministry source said.

On Monday, Athens ordered a radical overhaul of the country's costly pension system that it had warned faced collapse. But unions vowed to oppose the plan, which would see an average pension cut of seven per cent by 2030.

In Berlin, the Cabinet approved Germany's part in a separate €750-billion EU-IMF package agreed to prevent the Greek crisis from spreading to other weak eurozone economies.

After massive gains on Monday, stock markets slumped yesterday as the gloss came off the deal.

"The optimism from the one-trillion-dollar euro-area financial rescue package is dissipating as the focus shifts to the difficult fiscal changes that debt-ridden eurozone nations will have to implement to move toward long-term sustainability," Charles Schwab & Co. analysts said in a note to clients.

The euro, which briefly jumped above $1.30 on Monday, fell back just under $1.27 in European trade yesterday.

Major governments expressed optimism that the €750 billion set aside by the EU and IMF had ended the risk of a new debt crisis enveloping the global economy.

Angel Gurria, head of the Organisation for Economic Co-Operation and Development, said the package was credible and "the right size."