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| Greece predicts deeper 2012 recession | |
| (about 1 hour later) | |
| Greece is predicting its economy will shrink by much more than previously estimated this year. | |
| Its economy will contract by 6.5% this year, worse than a previous estimate of 4.8% in March suggested to its bailout lenders, it said in a draft budget submitted to parliament. | |
| Greece also said its economy will shrink for a sixth year in 2013. | |
| About 8bn euros worth of cuts have been proposed for 2013, covering public-sector pay, pensions and welfare. | About 8bn euros worth of cuts have been proposed for 2013, covering public-sector pay, pensions and welfare. |
| The economy will contract by 3.8% next year, the Greek government predicted. | |
| The deeper contraction in the economy means that Greece will have to find extra money. | |
| This may occur through further spending cuts and tax rises, or through additional money from its lenders - perhaps in the form of write-offs or postponements of what Greece already owes them. | |
| 'More anger' | |
| Spending cuts are necessary if Greece is to get the next instalment of the funds from the IMF and eurozone that bailed it out - again - earlier this year. In March, when Greece agreed its latest bailout with its lenders, it predicted the economy would shrink by 4.8%. | |
| "Confirmation of the cuts will prompt more anger here, where almost one in four Greeks are now unemployed, a record high," said the BBC's Mark Lowen in Athens. | "Confirmation of the cuts will prompt more anger here, where almost one in four Greeks are now unemployed, a record high," said the BBC's Mark Lowen in Athens. |
| "The aim is to return the country to what's called a primary surplus, so the only deficit Greece would face would be due to the interest it's paying on its debt. More cuts are likely to come in 2014." | "The aim is to return the country to what's called a primary surplus, so the only deficit Greece would face would be due to the interest it's paying on its debt. More cuts are likely to come in 2014." |
| The Bank of Greece had estimated that the country's economy would contract by about 5% this year. | |
| The three parties in government reached a "basic agreement" on the austerity package for 2013-14 only last week - which came after 50,000 anti-austerity protesters took to the streets of Athens. | The three parties in government reached a "basic agreement" on the austerity package for 2013-14 only last week - which came after 50,000 anti-austerity protesters took to the streets of Athens. |
| The Greek government hopes to be able to present a final package of measures to the summit of eurozone finance ministers on 8 October. | The Greek government hopes to be able to present a final package of measures to the summit of eurozone finance ministers on 8 October. |
| Greece received a bailout of 110bn euros in 2010 and 130bn euros earlier this year. | Greece received a bailout of 110bn euros in 2010 and 130bn euros earlier this year. |
| In recent months, concerns that Spain and Italy may need bailouts have eclipsed concerns over Greece and whether it can cut spending enough to remain in the euro. | In recent months, concerns that Spain and Italy may need bailouts have eclipsed concerns over Greece and whether it can cut spending enough to remain in the euro. |
| Are you in Greece? What is your reaction to the draft budget? Send us your comments and experiences using the form below. | Are you in Greece? What is your reaction to the draft budget? Send us your comments and experiences using the form below. |