Greece worries hammer home amid gloomy forecast

ATHENS, Greece – Political and financial uncertainty in Greece saw shares on the Athens Stock Exchange drop to their lowest level in 22 years on Tuesday, despite broad gains in European markets, after the crisis-hit country got another gloomy growth forecast.

The exchange's general index dropped 1.84 percent to 534.55, slightly lower than the 1990 annual average, in late afternoon trading.

Greek shares have lost nearly 90 percent of their value since 2008, when the recession began.

The Organization for Economic Cooperation and Development, issuing its global economic outlook Wednesday, predicted that Greece's gross domestic product would shrink 5.3 percent this year and a further 1.3 percent in 2013 — worse that EU predictions.

Greece is heading to fresh elections on June 17, after May 6 polls produced a political deadlock, with pro- and anti-bailout parties unable to reach a coalition agreement. The impasse has revived fears of a Greek exit from the euro.

Caretaker Prime Minister Panagiotis Pikrammenos was to hold an emergency Cabinet meeting ahead of Wednesday's summit of European Union leaders. The Brussels meeting is expected to look into spurring economic growth across the continent.

Pikrammenos urged Greece's unions, employers and political partners to show restraint ahead of the June elections.

"In the interest of harmony in society, they must collaborate in a way that will not ignite the atmosphere in this difficult time," he said.

The Finance Ministry, meanwhile, said the state budget deficit for the first four months of the year as recorded at €9.15 billion ($11.68 billion), beating a target of €11 billion ($14.04 billion) with weak revenues offset by better-than expected spending cuts.