Spending Cuts, 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.

Tens of thousands of anti-austerity demonstrators took to the streets of Athens on Wednesday as unions staged a general strike to protest government spending cuts and tax hikes, which some predict will push unemployment to an alarming 30 percent. Police said up to 40,000 people were participating in two separate marches in central Athens that were so far peaceful.

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move it described as "unprecedented".

French economic growth ground to a halt in the second quarter, raising pressure on the government to cut spending and abolish tax breaks to convince turbulent financial markets it will deliver on debt reduction targets.

Britain outlined the sharpest cuts to public spending since World War II on Wednesday.

Leaders' dilemma is how to cut spending without undermining the economies they seek to sustain.