German Chancellor Angela Merkel is seen as a prisoner with handcuffs on the cover page of the Greek magazine Crash with the headline reads “Lagarde, Merkel, Soible, Barroso, Robey: They should be tried for genocide of the Greeks” in Athens. (AP-Yonhap News)
ATHENS (AFP) ― The Greek economy, struggling in a fifth year of recession, shrank 6.2 percent in the second quarter compared with a year earlier, official data showed on Monday.
The economy contracted 6.5 percent in the first quarter, worse than the initially given 6.2 percent, according to revised figures issued in June.
The Bank of Greece expects the economy to shrink 4.5 percent for 2012 as a whole, following a 6.9 percent 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 240 billion euros ($295 billion) for its economic survival.
Last year, private creditors agreed to write-off more than 100 billion euros in debt, roughly half the amount they were owed, as part of a second bailout program.
Harsh austerity measures and economic reforms linked to the aid agreements have taken their toll on the economy, with unemployment hitting record highs.
The latest official data, made public last week, showed a record 23.1 percent jobless rate for May, with almost 1.15 million people registered as unemployed.
The conservative-led coalition government has yet to finalize spending cuts of about 11.5 billion euros in order to unlock its next aid installment worth some 31 billion euros.
The cuts will be presented to the auditors of the country’s international EU, International Monetary Fund and European Central Bank creditors, who visited Athens recently and are expected to return in September.
The so-called troika of auditors has said it will remain in the Greek capital for the entire month.
Following a two-month political deadlock, as a result of back-to-back elections in May and June, Greece has fallen behind in the implementation of reforms that are part of its loan agreements, amid mounting international pressure.
In an effort to ensure that international support for Greece will continue, Greek Prime Minister Antonis Samaras is scheduled to meet head of the eurozone finance ministers group Jean-Claude Juncker in Athens on Aug. 22.
Samaras will also meet German Chancellor Angela Merkel in Berlin on Aug. 24 and French President Francois Hollande the next day in Paris.
On Monday, deputy head of Merkel’s parliamentary bloc Michael Fuchs told German newspaper Handelsblatt that Berlin is ready to use its “veto” if Athens does not fully comply with the terms of the rescue packages.
Jose Manuel Barroso, President of the European Commission, said Greece must deliver on its obligations if it wishes to remain in the eurozone, during a visit to Athens at the end of July.
