Economy, Europe Debt | featured news

The International Monetary Fund on Tuesday shaved projections for global economic growth for this year and next to take into account sharp government spending cuts in the United States and the latest struggles of recession-stricken Europe.

Unemployment in the euro zone rose to yet another record high in the first two months of the year, official data showed Tuesday, providing confirmation that the economy remains in a deep freeze.

As it tries to play Russia off against Europe to salvage its economy, Cyprus has embarked on a high-stakes poker game that could see almost everyone lose.

Homeowners have told of how sales of their properties are on hold and businesses have called for clarity amid banking uncertainty in Cyprus. The country is braced for an emergency session of its parliament, and a planned vote, regarding a 10bn euro ($13bn; £9bn) financial rescue.

Thousands of workers protested in Brussels on Thursday to demand that EU leaders gathering for a summit bring an end to austerity measures and instead focus on boosting growth and reducing unemployment.

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

Even as the euro zone periphery starts to spy some glimmers of hope, concern is mounting that Germany is drifting apart from other countries at the core of the single currency bloc, notably France.

Tens of thousands of anti-austerity demonstrators took to the streets of Athens on Wednesday as unions staged a general strike to protest government spending cuts and tax hikes, which some predict will push unemployment to an alarming 30 percent. Police said up to 40,000 people were participating in two separate marches in central Athens that were so far peaceful.

The Greek government says its painful austerity drive is paying off, with the budget deficit reduced to 6.6 percent of annual output in 2012 from 9.4 percent a year earlier. A finance ministry statement Monday said that, not counting the cost of servicing Greece's debt mountain, the government posted a modest budget surplus of €434 million ($588 million) last year.

Local governments across Spain have been paying their suppliers' bills months behind schedule, forcing companies to help shoulder the financial woes of the Spanish government.