Greece’s Situation Continues to Worsen

The Greek economic situation is worsening fast.

Investors are demanding punishingly high interest rates – over 8.7% for 10-year Greek bonds – as the country’s budget deficit for last year was revealed to be worse than expected.

The European Union’s statistics office Eurostat disclosed on Thursday Greece’s 2009 ballooning budget deficit was 32.34 billion euros, or 13.6% of GDP in 2009, not 12.7.% that was reported previously. Eurostat also said Greece’s deficit could be further revised by up to 0.5 percentage points due to the quality of the country’s data and accounting procedures.

AP: “It is clear that the Greek situation is a very serious one,” IMF chief Dominique Strauss-Kahn said in Washington, where he is to meet with Finance Minister George Papaconstantinou on Saturday. “There is no single way, no silver bullet to solve it in an easy manner.”

Eurostat’s revision came as a credit agency downgraded the country’s sovereign debt rating to near junk status, and as Greece is paralyzed once again by another 24-hour strike with tens of thousands of public workers protesting against huge slashes in government funding.

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