Greek Economy Stuck In Deep Recession

Published February 14, 2012 12:09PM (EST)

ATHENS, Greece (AP) — The Greek economy remained stuck in a deep recession in the fourth quarter, according to official figures released Tuesday that confirm the painful effects of austerity reforms intended to lower debt.

Gross domestic product dropped by 7 percent on the year in the fourth quarter of 2011, in non-seasonally adjusted terms, the Greek Statistical Authority said.

The struggling eurozone country has been shut out of long-term debt markets since 2010, and is surviving on rescue loans from European Union countries and the International Monetary Fund. But harsh austerity measures demanded in return for the emergency loans have hammered the economy.

Greece's economy has been in decline since late 2008, with successive quarterly contractions since then, with the exception of the first quarter of 2010.

On Tuesday, the Public Debt Management Agency said it had raised euro1.3 billion ($1.7 billion) in an auction of 13-week treasury bills at a rate of 4.61 percent — down from the 6.64 percent rate from the previous sale of three-month debt on Jan. 17.

Parliament on Sunday approved a new round of austerity measures, slashing the minimum wage and planning mass layoffs in the civil service, amid rioting in Greek cities that saw dozens of stores looted and burned.

National Confederation of Greek Commerce on Tuesday said 153 businesses in Athens had been damaged, 45 of them destroyed — figures that are higher than initial police estimates released Monday.

More trouble was reported Tuesday in the western Greek town of Agrinio, where police said a group of about 50 youths, smashed banks, storefronts and a post office before clashing with police.

By Salon Staff

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