Eurozone crisis hits development
funds - The eurozone crisis is having far-reaching effects, not least on the aid
being sent to the developing world. Deep cuts in aid budgets by crisis-stricken euro zone countries have prompted
the biggest fall in development assistance to the world’s poorest nations since
the mid-1990s. Sharp drops in spending by Spain, Italy, Greece and Portugal
resulted in a 4% decline in financial assistance to the developing world in
2012, according to the annual assessment conducted by the Organisation for
Economic Cooperation and Development. The OECD, a club for 33 rich nations,
said it was concerned by the decline, which it blamed on the austerity
programmes forced on many euro zone countries over the past three years. After
a 2% drop in 2011, the decline in 2012 was the biggest in 15 years and was the
first back-to-back drop in development assistance since 1996-97 - the years
immediately before the mass public campaigns in the West for debt relief and
increased development assistance.
Over to Italy, where the treasury has cut its growth
expectations, just two weeks after the last forecasts. Treasury
undersecretary Gianfranco Polillo said the economy is likely to contract
by 1.5% and 1.6% this year. Speaking to Radio 24, he said: This year
we will see a fall in gross domestic product of 1.3% if things go well, but it
will probably be -1.5% or -1.6%. The currency bloc's third largest economy has
shrunk for six consecutive quarters, its longest recession in 20 years. Mario
Monti's outgoing government slashed this year's forecast to -1.3% last moth from
its previous estimate of -0.2%.
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LISBON—Portugal's Constitutional Court struck down some austerity measures planned by the government, forcing Prime Minister Pedro Passos Coelho to find new ways to lower the budget deficit or risk derailing the country's €78 billion ($101 billion) international bailout program.
The court's ruling late Friday is binding on the government
25 March 2013 Last updated at 15:32 Help The president of the Eurogroup, Jeroen Dijsselbloem, has announced details of a deal to secure a bailout loan for Cyprus.
After all-night talks on 25 March 2013, he revealed that the deal would see the Laiki bank, the country's second largest, wound up, but with small savers protected.
Depositors with more than €100,000, many of whom are Russian, face big losses.
The European Central Bank had set a deadline of Monday for the deal, which came a week after the Cypriot parliament rejected a proposed bank levy on small and large deposits.
"We've put an end to the uncertainty that has affected Cyprus and the euro area over the past week," said Mr Dijsselbloem.
The Eurogroup is the main forum for the management of the single currency area. It is an informal body that brings together the finance ministers of countries whose currency is the euro.
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