The outlook for Greece darkened yesterday as it plunged deeper into recession and eurozone leaders cancelled a meeting to discuss a crucial bailout.

New figures showed that economic output slumped by 7 per cent year-on-year in the fourth quarter of 2011 – amid increasing fears that Greece will not deliver the £2.8billion cuts package it has pledged in return for another huge bailout.

Experts had expected a fall of only 5 per cent ahead of the latest round of deeply unpopular austerity measures.

Greece is now in its fifth year of recession and faces even deeper spending cuts in exchange for bailout funds from Europe and the Inter-national Monetary Fund.

‘We were expecting the recession to get worse but not at this pace,’ said Nikos Magginas, senior economist at National Bank of Greece.

Fears that Greece is heading for a chaotic default on its towering debts were fuelled after an emergency meeting of eurozone finance ministers planned for tonight was cancelled. Read More

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