Austerity brings Greek Tragedy

Posted on: 09 June 2011 by Alexander Hay

Slashing spending to the bone does in your economy - who'd have thought it?

The Greek economy, yesterday

Naturally, our austerity drive isn't all like the Greeks' - is it?

Greece's crisis-hit economy expanded by a sickly 0.2% in the first three months of this year – even worse than first thought – as its fiscal austerity measures strangled demand, official figures have revealed.

The bailed-out economy is now shrinking at an annual rate of 5.5%, instead of an initial estimate of 4.8%, the Greek statistical agency said on Thursday.

Bond yields jumped after the announcement, with the government now facing paying 25.08% over two years if it tried to borrow from the financial markets. The cost of insuring Greek debt against default also hit new record highs.

Athens is widely expected to receive a fresh bailout from its eurozone partners in the coming weeks, but Germany is locked in a standoff with the European Central Bank about the terms of any new assistance package, and whether Greece's private sector creditors will have to bear part of the cost...

And so the Greek Tragedy continues.

[SOURCE: The Guardian]

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