Global Economy, Austerity | featured news

Greece faces another tough year in 2012 but must stick to its program of austerity and reform to stay in the euro, Prime Minister Lucas Papademos said in a pre-recorded New Year's Eve address.

Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that drastic steps taken to avert bankruptcy may not be enough.

The Italian austerity budget worth nearly 48 billion euros was approved by the upper house of parliament on Thursday, overcoming its first parliamentary hurdle.

Austerity measures being adopted by many industrialized world governments in the wake of the 2008-09 financial crisis are undermining economic recovery, a United Nations report said on Wednesday.

Portugal will elect a new government on Sunday which will lead the country through a period of deep austerity and recession after it received a 78-billion-euro ($114 billion) bailout from the European Union and IMF.