Greek economy shrinks 6.2%

2012-08-13 12:17

Athens - The Greek economy, struggling in a fifth year of recession, shrank 6.2% in the second quarter compared with a year earlier, official data showed on Monday.

The economy contracted 6.5% in the first quarter, worse than the initially given 6.2%, according to revised figures issued in June.

The Bank of Greece expects the economy to shrink 4.5% for 2012 as a whole, following a 6.9% drop last year.

The country is relying on two financial rescue packages backed by the EU, the International Monetary Fund and the European Central Bank worth around €240bn for its economic survival.

Last year, private creditors agreed to write-off more than €100bn in debt, roughly half the amount they were owed, as part of a second bailout programme.

Harsh austerity measures and economic reforms linked to the aid agreements have taken their toll on the economy, with unemployment hitting record highs.

The conservative-led coalition government has yet to finalise spending cuts of about €11.5bn in order to unlock its next aid installment worth some €31bn.

  • J.Stephen.Whiteley - 2012-08-13 14:49

    Shrinkage is not the result of austerity; austerity is the nceassary result of shrinkage. The remedy for shrinkage, believe it or not, is work.

      boris.dietrol - 2012-08-13 15:25

      Very well put sir.

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