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ATHENS, Greece (AP) â¿¿ Greece's coalition government on Thursday reported a steep drop in the budget deficit in 2012, but unemployment rose again at an alarming rate as state spending cuts continued to hurt the economy and erode living standards.
Deputy Finance Minister Christos Staikouras said provisional data showed the annual budget shortfall was 8.2 percent of gross domestic product in 2012, down from 10.9 percent the previous year and slightly better than the target of 8.4 percent.
Greece has been struggling through a severe financial crisis since late 2009, and it has been dependent on international rescue loans since May 2010. To get the bailout, the conservative-led government has slashed salaries, cut spending and increased taxes to reduce debt. The measures, however, have also kept the country in a deep recession now in its sixth year. Tens of thousands of businesses have shut down.
"The massive sacrifices being made by the Greek people are producing results," Staikouras said of the drop in deficit. "But the course we are on remains long and hard."
A new opinion poll published Thursday showed that the main partner in the three-party coalition government, New Democracy, has regained a slender lead over the main opposition Radical Left Coalition, or Syriza.
The Public Issue survey for private Skai TV gave ND 29 percent, over Syriza's 28.5 percent. The ultra-right Golden Dawn party came third at 10 percent. The company's previous poll in December had given Syriza a 4.5 percent lead over ND. The phone poll conducted Jan. 4-8 had a maximum 2 percent margin of error.
Critics of the government, which was formed with a four-year mandate after elections last June, argue it is chasing financial targets set by the rescue lenders at the expense of the Greeks. Poverty is rising rapidly and the state has put off paying many of its bills, on everything from electricity to one-off retirement payouts.