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Greek economy shrank by 7% in 2011

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The five year recession in Greece doesn't look much better now than it did at the start. Austerity is ripping the economy to shreds, delaying any hopes of recovery for an even longer period than necessary. There's no question that Greece needs economic reform, but at this point it's increasingly hard to see how austerity and more loans are the answer to the problems over default and exiting the euro-zone. Bloomberg:

Greece’s economy, reeling from austerity measures demanded by creditors in exchange for rescue funds, contracted almost a percentage point more last year than the government forecast, according to Bloomberg calculations. Gross domestic product fell 7 percent from a year earlier in the fourth quarter after contracting a revised 5 percent on an annual basis in the previous three months, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. GDP declined 6.8 percent in 2011, according to Bloomberg calculations, compared with a 6 percent contraction estimated in the government’s 2012 budget. “Recessionary pressures have intensified as the impact from additional austerity measures have been amplified by high uncertainty about the prospects of the country,” said Nicholas Magginas, an economist at National Bank of Greece SA in Athens.
Keep in mind that the Republicans are eager to roll out their own austerity plan. Between Greece and the UK, we've seen enough to know that austerity is not the answer.

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