Greek economy shrinks 6.2% in second quarter

The Greek economy, struggling in a fifth year of recession, shrank 6.2 percent in the second quarter compared with a year earlier, official data showed on Monday. The economy contracted 6.5 percent in the first quarter, worse than the initially given 6.2 percent, according to revised figures issued in June. The Bank of Greece expects the economy to shrink 4.5 percent for 2012 as a whole, following a 6.9 percent drop last year. The country is relying on two financial rescue packages backed by the EU, the International Monetary Fund and the European Central Bank worth around 240 billion euros ($295 billion) for its economic survival. Last year, private creditors agreed to write-off more than 100 billion euros in debt, roughly half the amount they were owed, as part of a second bailout programme. Harsh austerity measures and economic reforms linked to the aid agreements have taken their toll on the economy, with unemployment hitting record highs. The conservative-led coalition government has yet to finalise spending cuts of about 11.5 billion euros ($14 billion) in order to unlock its next aid installment worth some 31 billion euros.