Warning of ‘contagion’ in eurozone

AS Greece’s financial woes send shockwaves through the world’s financial markets, a leading economist has warned of its contagion effect on Ireland and other struggling European economies.

Greece has come under intense pressure to slash spending after it revealed a massive and previously undeclared budget shortfall last year.

Its deficit spiralled to above 12% of economic output in 2009, more than four times the eurozone limit.