A woman looks at a board depicting Germany's Chancellor Angela Merkel, Portugal's Prime Minister Pedro Passos Coelho and Foreign Minister Paulo Portas, the President of the European Commission Jose Manuel Barroso, the President of the European Central Bank Mario Draghi, and the CEO of the Deutsche Bank Josef Ackermann gambling in a casino, in Lisbon, Tuesday, Nov. 13, 2012. Portuguese main union General Confederation of Portuguese Workers, CGTP, has called for a general strike on November 14, coinciding with similar work stoppages in Spain and Greece, to protest government-imposed austerity measures and labor reforms. The poster was put by a left wing politic party called Bloco Esquerda near a bus stop. (AP Photo/Francisco Seco)

Marcus Bensasson Athens

Greece’s economy contracted for a 17th consecutive quarter, as the country’s slump deepened amid austerity measures tied to the country’s e240 billion (R3 trillion) bailouts from the EU and International Monetary Fund (IMF).

Gross domestic product (GDP) declined 7.2 percent in the third quarter from the same period last year after dropping 6.3 percent in the second, the Athens-based Hellenic Statistical Authority said yesterday. Seasonally adjusted data and quarter-on-quarter rates are not published.

Greece’s economic slump, now in its fifth year, has been exacerbated by austerity measures imposed by creditors to reduce its budget deficit. Legislators last week approved a further round of austerity measures and economic reforms, including e13.5bn of budget cuts for the next two years, to qualify for its next bailout tranche, which has been frozen since June.

“Greece has done a lot in terms of making efforts on austerity,” Michala Marcussen, the global head of economics at Société Générale, said yesterday. “Greece is also… in a situation where it’s difficult to see how we can continue with more and more austerity and have an economy that… is seeing a recession that’s becoming much more in line with the US Great Depression.”

The European Commission last week forecast Greece’s economy would contract 6 percent this year and a further 4.2 percent next year. At the end of this year, Greece will have lost a fifth of its economic output since it entered its recession in 2008.

Euro area finance ministers meeting in Brussels this week approved granting Greece an extra two years to meet its fiscal targets under the bailout, giving the country until 2016 to cut its budget deficit to 2 percent of GDP. The country’s budget for next year, approved by parliament on Monday, sees the deficit dropping to 5.2 percent next year from 6.6 percent this year.

Luxembourg’s Jean-Claude Juncker said he had called for a November 20 special meeting of finance ministers to make a “definite decision” on releasing the next tranche, worth e31.5bn, from Greece’s bailout. The tranche will mostly be used to recapitalise the country’s liquidity-starved banks.

Greece’s jobless rate rose to 25.4 percent in August from 24.8 percent the month before, the statistics agency said last week. The jobless rate for Greeks aged 15 to 24 was 58 percent, the highest in the 27-nation EU. – Bloomberg