Grim predictions by Brussels

The European Commission is now expecting extra cuts of 7.8 billion euros for 2013 from Athens, while considering the current salary drop rate insufficient and expecting unemployment to reach 20 percent, according to its spring report issued on Friday.

?Salaries in the private sector have been going down in the last few quarters,? the report suggested, but ?at a rate that is not sufficient to assist the country in regaining its competitiveness, which is partly due to the continuing containment of salaries in the country?s trade partners.?

The Commission sees the economy contracting by 4.7 percent of gross domestic product this year, with this figure approaching zero in 2013. It also forecasts deflation of 0.5 percent for this year and 0.3 percent in 2013. Unemployment is expected to come to 19.7 percent this year and 19.6 percent in 2013, after a rate of 17.7 percent in 2011.

The current account deficit is at ?unsustainable levels,? according to Brussels, as it will amount to 7.8 percent of GDP this year and 6.3 percent in 2013.