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Greece slashes further with 2011 budget

Greece slashes further with 2011 budget
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Greece has unveiled another austerity budget.

The aim is to cut its deficit to just seven percent of GDP next year; that is even lower than the 7.6 percent it promised the International Monetary Fund and other euro zone countries when they rescued Athens from bankruptcy.

Prime Minister George Papandreou and his cabinet are speeding up deficit-reduction at the same time as Greece’s economy is contracting.

The budget forecasts that GDP will fall by 2.6 percent next year after declining by a projected four percent this year.

It is anticipated the jobless rate will jump to 14.5 percent next year.

Over the weekend, Greece’s moribund economy did get a vote of confidence from the Chinese Prime Minister Wen Jiabao during a visit to Athens.

He spoke of his “joy” that Greece is starting to emerge from its severe debt crisis.

More importantly he pledged that Beijing will buy Greek government bonds when Athens resumes issuing them probably next year.

Wen also said China wants to boost economic cooperation and trade with Greece.