EU's Rehn: Greek Economy To Shrink More Than Expected In 2010-11

DJ EU's Rehn: Greek Economy To Shrink More Than Expected In 2010-11
BRUSSELS (Dow Jones)--The Greek economy will contract faster than expected in 2010 and 2011, due to sharper cuts to the country's budget, European Commissioner for Economic and Monetary Affairs Olli Rehn said Wednesday.  Greece in recent days announced a raft of new budget cuts to satisfy other euro-zone countries and the International Monetary Fund, which have created a EUR110 billion aid package for the country.  The commission, in quarterly forecasts published Wednesday, said Greece's economy would shrink 3% this year and 0.5% next year. These forecasts were based on information available before April 20, before Greece announced further budget cuts, Rehn told a news conference.  Rehn said Greece's bailout plan will reduce tensions in sovereign bond markets "over time," adding that such problems generally don't improve overnight.