Greek PM warns economy to shrink by more than 5.5 per cent in 2011

ATHENS, Dec 15 (AFP): Greece will chalk up its worst-ever recession this year, Prime Minister Lucas Papademos warned Wednesday, with the contraction in the eurozone member to be greater than the 5.5 per cent forecast. "2011 will be the worst recession here ever" with gross domestic product (GDP) contracting by "over 5.5 per cent" as the government has officially forecast, Papademos said at a dinner organised by the American-Greek Chamber of Commerce. Greece's economy shrank by 4.5 per cent in 2010, but the austerity measures demanded by its international creditors for Greece to get a handle on its massive deficit and debt have sent the economy into an even deeper recession. "We have a hard way to go," said Papademos in his first public comments on the issue after being nominated to head a coalition government on November 11. He said the priorities of his government would be "reform of the public administration," a "radical overhaul of the tax collection mechanism", fighting tax cheats and speeding up privatisation. Papademos said a European decision to install tough new fiscal rules will help "avert a recurrence of fiscal deficits that led us to this crisis." "In 2012, private funds expected to be invested would be at least of 9 billion euros," he added.