Greece's economy shrinks by 7% Greece's recession worsened at the end of last year, new figures showed on Tuesday, adding to the pressure on a government caught between riots at home and pressure from eurozone leaders to force through deep spending cuts in exchange for a fresh €130bn bail-out. The economy contracted by 7 per cent in three months to December compared with the same period in the previous year, a steeper decline than the 5 per cent recorded in the third quarter, according to preliminary data published by Elstat, the national statistics body. Greece's economy has now shrunk in every quarter but one since mid-2008. The figures came ahead of a cabinet meeting at which Lucas Papademos, the technocrat prime minister, is expected to seek agreement on further details of austerity measures designed to persuade eurozone finance ministers to sign off on a fresh bail-out when they meet on Wednesday. The so-called euro working group, comprising finance ministry officials from all 17 eurozone member states, is also due to discuss the crisis on Tuesday, as Greece struggles to seal a €200bn restructuring of privately held debt before a €14.5bn redemption due on March 20. One eurozone official told the FT on Monday that there were at least half a dozen items that Greece would have to accept before the deal would be submitted for approval by the finance ministers. Greek leaders are struggling to reconcile pressure from their eurozone counterparts, who are demanding strict fiscal discipline as part of a deal to help Greece avoid a debt default that would send tremors through the region's already fragile banks, and mounting outrage at home at the scale of the spending cuts. That outrage spilt on to the streets at the weekend, after the leaders of Greece's main political parties, which are joined in a unwieldy coalition, agreed €3.3bn of spending cuts for this year. Protests turned violent as arsonists struck almost 50 buildings in Athens and the city centre saw widespread looting. In a fresh sign of the extent to which the fallout from the Greek debt crisis is spreading through corporate Europe, Franz Fehrenbach, the chief executive of Bosch, the world's biggest car parts supplier, on Tuesday urged Greece to leave the European Union and single currency. Mr Fehrenbach described Greece as an "unacceptable burden" on the EU and eurozone. He told Manager Magazin in an interview that if the country did not leave voluntarily, the EU should change its laws so Greece could be made to do so. The German magazine said 57 per cent of 300 German managers it had surveyed were in favour of Greece reintroducing the drachma. Mr Fehrenbach's comments follow revelations last week that leading companies, including drugmaker GlaxoSmithKline and telecoms group Vodafone, have started to withdraw cash from Europe's more fragile countries every day. However, there was a fillip for eurozone leaders in their efforts to increase the firepower of the currency union's rescue funds on Tuesday, when Wen Jiabao, China's prime minister, reaffirmed Beijing's interest in investing in the them. "China's willingness to support Europe to cope with sovereign debt problems is sincere and firm," Mr Wen told a joint press conference today in Beijing with Herman Van Rompuy, president of the European Council. China is ready to get more deeply involved in participating in solving the European debt issue. The euro recovered early losses to trade up 0.1 per cent at $1.3203, after the ZEW survey of economic sentiment in Germany, the eurozone's powerhouse, rose much more than expected, and investors shrugged off a warning of eurozone downgrades by Moody's, the credit rating agency, to drive Italian yields to their lowest for nearly a year at a successful €6bn debt auction. New figures showed eurozone industrial output contracted significantly late last year, adding to fears that the eurozone has slipped back into recession.