The Chancellor of the Exchequer Alistair Darling forecasted a UK budget deficit (see British POUND likely to fall further) of £178 billion in his last budget speech in 2009 but analysts are suggesting it might hit £200 billion. I know, sounds bad. The article UK Deficit 178 Billion? Make That 300 Billion also explains more about the UK budget deficit.
Greece on the other hand is faring worse with a budget deficit of £272 billion raising concerns for the EURO which has been falling recently as investors lose confidence in Europe's common currency. The main reason being the worry that Greece's inability to cope with its swelling budget deficit may hamper Europe's recovery from the economic recession.
With Greek Unions staging strikes on cuts and Brussels, the EU capital demanding cuts, Greek Prime Minister George Papandreou (try pronouncing his surname) is definitely being slapped around.
Determined to get things under control, Papandreou announced on Wednesday to cut public spending by €4.8 billion, cut bonuses for civil servants, increase tax on alcohol, cigarettes, fuel and raise VAT to 21%. This saw the EURO pick up boosting investor confidence in buying Greek debt (Greek government bonds) and the EURO. However, this is just the beginning and what happens next remains to be seen.
