Greece's Economic Slump Deepens in Q3

World | November 14, 2012, Wednesday // 15:37| Views: | Comments: 0
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Bulgaria: Greece's Economic Slump Deepens in Q3 Pedestrians stand in the street near smashed glass after clashes between riot police and angry protesters on the evening of 07 November, in central Athens, Greece, 08 November 2012. Photo by EPA/BGNES

The Greek economy shrank 7.2% in the third quarter compared with the same period a year earlier, statistics agency Elstat has said.

The contraction was deeper than the second quarter's 6.3% fall and comes days after parliament passed a stringent 2013 budget, which is expected to continue to stifle growth for most of next year.

Greece has been in recession since late 2008 and has been granted two bailouts from the European Union and International Monetary Fund.

Eurozone ministers decided to give Greece two more years, until 2016, to meet its deficit-reduction targets, but delayed their final say on the latest EUR 31.5 B tranche of bailout funds.

The ministers meeting in Brussels earlier this year endorsed a proposal to extend from 2014 to 2016 a deadline for Greece to reduce its budget deficit, as demanded by international lenders.

The ministers will meet again to discuss releasing the latest tranche of bailout funds on 20 November.

Greece can get the money however only following the approval by some national parliaments, including Germany's.

The eurozone ministers meeting in Brussels came days after the Greek parliament narrowly adopted a fresh round of austerity measures and an austerity budget for next year, despite violent protests across the country.

The EUR 13.5 B bill envisages a two-year increase in the retirement age from the current average of 65, as well as salary cuts and labor market reforms, including cuts to holiday benefits, notice periods and severance pay.

Prime Minister Antonis Samaras has warned before the vote that without the bailout Greece would run out of money this month and face "catastrophe".

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