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Greek economy slides back into recession

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A first-quarter estimate by statisticians has suggested the Greek economy has slipped backed into recession. The cash-strapped southern eurozone nation is facing fresh spending cuts - and more protests by workers.

Greeces national statistics office, Elstat, announced Monday its preliminary figures saw the euro area nation slither into recession again in the January to March period, with its gross domestic product dipping by 0.1 percent quarter on quarter.

The marginal drop at the beginning of the year followed a more pronounced 1.2-percent decrease in GDP in the October to December period.

For economists, two straight quarters in negative territory are enough to speak of a recession. The European Commission last week lowered its growth outlook for the country, predicting the economy would grow by 2.1 percent in 2017, down from its previous forecast of a 2.7-percent annualized expansion rate.

Painful reforms

Ending six months of bickering between the government and international creditors, a deal was struck last week on a new austerity package as a precondition for more financial aid from lenders.

The planned measures include pension cuts and tax hikes amounting to savings of 4.9 billion euros ($5.3 billion) annually.

But the package looks hard to sell to workers across the nations. The PNO ferry workers union on Monday announced a 48-hour strike starting Tuesday. Not a single ferry is to depart from ports in the Aegean Sea during the stoppage, meaning that islands without an airport will effectively be cut off.

Greece has been warding off bankruptcy over the past seven years and is due to repay more than 7 billion euros to the European Central Bank (ECB) and the International Monetary Fund (IMF) in July.

hg/bea (dpa, Reuters)
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