Greek Economy Keeps on Crumbling

Greece's economy shrank further in the first three months of 2012, shriveling at a yearly rate of 6.5 percent against a backdrop of painful wage cuts, tax hikes and record unemployment. The data, released on Friday, will add fodder to politicians campaigning against terms of an international bailout ahead of a June 17 parliamentary election.

Painful budget austerity has deepened Greece's economic malaise, turning voters away from mainstream political parties that backed a European Union/International Monetary Fund rescue deal. Supporters and opponents of the bailout are running neck and neck in opinion polls for the June vote, seen as crucial for the country's future in the euro zone.

The first quarter Gross Domestic Product preliminary projection was based on seasonally unadjusted data. It topped a previous -6.2 percent year-on-year flash estimate and follows a 7.5 percent year-on-year GDP decline in the last quarter of 2012, statistics service ELSTAT said. A narrower trade deficit provided some relief but was not enough to make up for sharp falls in consumer and investment spending. Read more >>