Greece reveals deeper than expected deficit

News sends European markets tumbling, adds to default fears

Markets in Europe got off to a shaky start this week after Greece reported that its budget deficit is set to grow this year. The announcement added more clout to the widespread fears of a Greek debt default and an ensuing economic collapse. On Sunday, the Greek finance ministry revealed the Greek deficit will be 8.5 per cent of GDP this year, up from the 7.8 per cent originally expected. The ministry blamed a deeper-than-expected recession for the growth. The Greek economy is projected to shrink by 5.5 per cent this year. The government has been relying on EU and IMF loans to pay its bills for months. Representatives from the IMF, European Commission and European Central Bank are meeting this week in Athens to decide whether Greece will be able to repay the next round of bailout money. The government needs another 8 billion euros to survive past mid-October.

CBC News



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