Greek economy shrinks by 6.2%

13 Aug 12
Greece’s economy has shrunk for the ninth successive quarter but the contraction is slightly less than previously, according to figures published today by the Greek Statistical Office.

By Nick Mann | 13 August 2012

Greece’s economy has shrunk for the ninth successive quarter but the contraction is slightly less than previously, according to figures published today by the Greek Statistical Office.

The country’s gross domestic product between April and June was 6.2% less than the same period a year earlier. In the previous quarter, the Greek economy shrank by 6.5% year-on-year and in the final three months of 2011 output fell by 8.5%.

Greece last recorded a positive quarterly growth figure in the first quarter of 2010, when its economy grew by 0.4%. The last time it recorded two consecutive quarters of GDP growth was the middle of 2008.

The announcement comes as  the government prepares to auction a further €3.125bn of government bonds tomorrow in a bid to raise funds to pay off a €3.2bn debt due for repayment on August 20.

Greece is currently in talks with the ‘troika’ – the European Commission, European Central Bank and International Monetary Fund – about the austerity measures it will have to introduce to secure its next tranche of bailout funds.

Olli Rehn, vice-president of the European Commission, yesterday praised Greece’s progress in addressing its economic problems. Writing in the Wall Street Journal, he said ‘Greece has achieved more than is often realised.

‘Its current government is committed to reforms and enjoys broad parliamentary backing. Negotiations are ongoing over the future of the Greek economic adjustment programme.’

Advocating an ‘Economic and Monetary Union 2.0’, Rehn said the joint issuing of debt by eurozone countries and deeper integration of budgetary decision-making needed to go hand in hand.

‘Translating this principle into concrete action will not be easy. The choices are of fundamental importance to the future of Europe. As such, all efforts must be made to ensure that they are taken in a way that European citizens consider legitimate,’ he wrote.

‘The sovereign-debt crisis has both underlined the need and created the conditions for Europe to rebuild and reinforce its economic and monetary union. Thus the euro zone will continue to defy its detractors,’ he added.

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