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Grim news for Greek recession

Wednesday, October 31, 2012 - 01:59

Oct. 31 - Greece announces its 2013 budget against a backdrop of protests, predicting a worse-than-expected recession in 2013. Ciara Sutton reports.

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It was a big day for news in Greece - the 2013 budget was submitted - but the story went largely unreported in Athens. Instead journalists marched on parliament in protest at changes to pensions and health insurance. (SOUNDBITE) (Greek) MARCOS GEORGANTAS, A JOURNALIST, SAYING: "We have been paying into and supporting our pension funds very well on our own and we don't want to merge our fund with the new national fund." Their demonstration was one of many as the government announced the recession will be worse than expected next year, with the economy contracting around 4 and a half percent. The budget also includes spending cuts and tax measures worth 13.5 billion euros. It must be approved by parliament by the end of next week if Greece is to get its next tranche of aid. The government says talks with the troika are - at least - now complete and an austerity plan is in place. European finance ministers have also been discussing Greece during a phone conference. They will be well aware the outlook for the euro zone as a whole remains bleak. Latest unemployment figures for the region hit record levels, with worse to come next year. Economists expect the ECB to cut interest rates again before the end of the year to support the slowing economy. But Joe Rundle from ETX Capital says the bloc's future remains in the balance. (SOUNDBITE) (English) JOE RUNDLE, HEAD OF TRADING, ETX CAPITAL, SAYING: "If the euro zone crisis were to spiral out of control again and the bailout and OMT program isn't agreed to and involves political fighting, that will put a break and a reverse onto the stock markets, pending that I think we'll see an uplift into the year end." Portugal has also approved the biggest tax increases in the country's modern history. It's searching for ways to meet goals set under its 78-billion euro bailout deal with the EU and IMF. But it too is facing a third year of economic contraction as households face the higher taxes and record unemployment.

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Grim news for Greek recession

Wednesday, October 31, 2012 - 01:59