Europe, Global Economy | featured news

The International Monetary Fund on Tuesday shaved projections for global economic growth for this year and next to take into account sharp government spending cuts in the United States and the latest struggles of recession-stricken Europe.

This year now looks unlikely to deliver much improvement in the world economy's growth rate, with a weaker outlook for Europe and the United States tempering the cautious optimism that was evident in January.

Italian President Giorgio Napolitano expressed despair on Tuesday at fierce criticism of his latest plan to end a post-election deadlock that has raised fears of months of instability in the euro zone's third largest economy.

Unemployment in the euro zone rose to yet another record high in the first two months of the year, official data showed Tuesday, providing confirmation that the economy remains in a deep freeze.

As it tries to play Russia off against Europe to salvage its economy, Cyprus has embarked on a high-stakes poker game that could see almost everyone lose.

Homeowners have told of how sales of their properties are on hold and businesses have called for clarity amid banking uncertainty in Cyprus. The country is braced for an emergency session of its parliament, and a planned vote, regarding a 10bn euro ($13bn; £9bn) financial rescue.

Italy's new parliament met on Friday for the first time since last month's inconclusive election with no sign of a deal to end the stalemate and yield a government able to address the deep problems in the euro zone's third-largest economy.

Thousands of workers protested in Brussels on Thursday to demand that EU leaders gathering for a summit bring an end to austerity measures and instead focus on boosting growth and reducing unemployment.

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

The European Central Bank has left its benchmark interest rate unchanged at a record low of 0.75 percent, holding off on further stimulus even though the euro area remains stuck in recession.