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Greek PM says 2011 will be last year of recession

By Katy Byron, CNN
The Greek Prime Minister George Papandreou has told his cabinet that 2011 will be the last year of recession for the country.
The Greek Prime Minister George Papandreou has told his cabinet that 2011 will be the last year of recession for the country.
STORY HIGHLIGHTS
  • "The Greek people have been tested as never before"
  • PM says economic growth will commence in 2012
  • Lawmakers approved an austerity budget last week

(CNN) -- Greek Prime Minister George Papandreou sought to calm the nation's economic jitters for 2012 in his address to his cabinet Wednesday.

"The government's goal for 2011 is to be the last year of recession, while 2012 will be the year when economic growth will be launched so that in 2013, everything that led us to the crisis will be left behind," he said, according to the Greece's official Athens News Agency.

"This past year, the Greek people have been tested as never before," Papandreou said in the final cabinet meeting of 2011.

Greece's economy has suffered a severe blow after it was revealed early this year that the country's budget deficit was more than twice as big as forecast.

In May, the European Union and the International Monetary Fund agreed to a three-year, 110-billion-euro bailout package to save Greece from financial default.

This past year, the Greek people have been tested as never before.
--Greek Prime Minister George Papandreou.
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Last week, the Greek parliament approved an austerity budget that makes cuts required under conditions of the massive bailout. The 2011 budget foresees the deficit declining from 9.4% of GDP to 7.4%.

"If we hadn't done what we did, we wouldn't be able to prevent the country's bankruptcy and we would have been responsible for not doing everything in our power," Papandreou told his cabinet.

"In 2010, we managed to withstand the biggest crisis Greeks ever went through in recent history and, at the same time, major reforms of historic importance were launched for the creation of a new Greece," he added.

Greeks have been protesting the austerity measures throughout the year, most recently mid-December when huge crowds marched on parliament.

Most of the marchers were peaceful, but a small number of threw Molotov cocktails that burned two cars outside the upscale King George Palace hotel. Police responded with stun grenades and tear gas, and the entire exchange left the area filled with smoke and an acrid smell.