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07 September 2013

NY Times: Greek Prime Minister says positive economic data points to austerity easing

Prime Minister Antonis Samaras of Greece seized on new economic data on Saturday that indicated the country was on track to economic recovery and promised relief to Greeks weary of years of punishing austerity.

“Greece is turning the page”, Mr. Samaras told politicians and entrepreneurs at an annual international trade fair in the northern port of Thessaloniki. “There will be no more austerity measures”, he said.

Citing figures released on Friday by the national statistics agency, Mr Samaras said the Greek economy shrank 3.8 per cent in the second quarter, significantly less than an estimate of 4.6 per cent. It was the smallest contraction since 2010, when Greece signed its first multibillion-euro loan deal with its so-called troika of creditors — the European Commission, European Central Bank and International Monetary Fund. The improvement is largely the result of an unexpectedly strong rebound in the country’s crucial tourism sector, with a record 18 million foreign visitors expected this year, he said.

He said this would be the “first decisive step toward exiting the policy of memorandums”, referring to Greece’s two loan agreements since 2010, which are worth a total of €240 billion ($315 billion) and have been meted out in instalments in exchange for a series of austerity measures.

Greece remains wracked by political and economic instability and may even need additional bailout money. The IMF warned in a report at the end of July that a persistent recession, now in its sixth year, and the government’s failure to accelerate overhauls might create an €11 billion hole in Greece’s finances over the next two years.

The monetary fund said Greece’s economy could return to growth as early as next year. But that forecast comes with a question mark, given that output has fallen 25 per cent since its peak in 2007, while unemployment has surged to 27 per cent — the highest in the eurozone — and youth joblessness has exceeded 60 per cent.

Full article

© New York Times

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