Greece to stay in recession for 3rd straight year

Associated Press
February 15, 2011

Greece's economy will shrink by about 3 percent or more this year, the central bank predicted Tuesday, meaning the country would wallow in recession for a third straight year as it battles to recover from its devastating debt crisis.

Greece avoided bankruptcy last year due to a three-year, euro110 billion ($150 billion) international bailout loan package from other European Union countries using the euro and the International Monetary Fund. In return, the Socialist government has been implementing unpopular austerity measures, including raising taxes, cutting public sector salaries and overhauling labor legislation.

Gross domestic product "is expected to fall by about 3 percent in 2011, without ruling out a larger reduction," the Bank of Greece said in its monetary policy report.

The economy contracted 2.3 percent in 2009 and is projected to have fallen slightly more than 4 percent last year.

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