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| Greece recession will deepen, says Antonis Samaras | Greece recession will deepen, says Antonis Samaras |
| (about 4 hours later) | |
| Greece will suffer a much deeper recession than thought this year, Prime Minister Antonis Samaras has said. | Greece will suffer a much deeper recession than thought this year, Prime Minister Antonis Samaras has said. |
| He expects the economy to shrink by 7%, greater than the 5% forecast by the crisis-hit country's central bank. | He expects the economy to shrink by 7%, greater than the 5% forecast by the crisis-hit country's central bank. |
| Representatives of Greece's three international lenders have arrived in Athens in a bid to get its deficit cutting measures "back on track". | |
| But, Mr Samaras criticised comments by some foreign officials for "undermining" Greece's national effort. | |
| Without sufficient progress, it may not receive the final part of its bailout worth 31.5bn euros ($38bn; £24.5bn). | Without sufficient progress, it may not receive the final part of its bailout worth 31.5bn euros ($38bn; £24.5bn). |
| Assistance for Greece totalling 130bn euros was agreed in March, its second major rescue package, with strict conditions attached that force Greece to cut debt and spending. | Assistance for Greece totalling 130bn euros was agreed in March, its second major rescue package, with strict conditions attached that force Greece to cut debt and spending. |
| A deeper recession will not help Athens improve its performance, as it is already behind in its austerity plans because its economy is shrinking faster than forecast. | A deeper recession will not help Athens improve its performance, as it is already behind in its austerity plans because its economy is shrinking faster than forecast. |
| Mr Samaras said the country, which has been in recession for five years, would not return to growth until 2014. | Mr Samaras said the country, which has been in recession for five years, would not return to growth until 2014. |
| He is expected to ask for more time to repay its loans. | He is expected to ask for more time to repay its loans. |
| Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full | Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full |
| The Bank of Greece had been expecting GDP to shrink 5% this year, which would have been its deepest recession since the 1930s. | The Bank of Greece had been expecting GDP to shrink 5% this year, which would have been its deepest recession since the 1930s. |
| Economists calculate that Greece may need a third rescue package worth up to 50bn euros. | Economists calculate that Greece may need a third rescue package worth up to 50bn euros. |
| Greece's performance is being assessed by the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission, who together have been dubbed the troika. | Greece's performance is being assessed by the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission, who together have been dubbed the troika. |
| The IMF said it was "supporting Greece in overcoming its economic difficulties" and would work with the country to get it "back on track". | The IMF said it was "supporting Greece in overcoming its economic difficulties" and would work with the country to get it "back on track". |
| However, reports over the weekend suggested that the IMF would refuse calls for further aid. | However, reports over the weekend suggested that the IMF would refuse calls for further aid. |
| New visitor | New visitor |
| Meanwhile Greece is expecting another high-profile visitor this week. | Meanwhile Greece is expecting another high-profile visitor this week. |
| The European Commission president, Jose Manuel Barroso, is planning his first visit to the country since 2009. | The European Commission president, Jose Manuel Barroso, is planning his first visit to the country since 2009. |
| "The purpose of the meeting is to meet Mr Samaras and discuss the overall economic situation in Europe and in particular in Greece," Mr Barroso's spokesman said. | "The purpose of the meeting is to meet Mr Samaras and discuss the overall economic situation in Europe and in particular in Greece," Mr Barroso's spokesman said. |
| He said it was "a regular meeting" and that the preparation for the talks had been "under discussion for some time". | He said it was "a regular meeting" and that the preparation for the talks had been "under discussion for some time". |
| Greece has promised to reduce its budget deficit to below 3% of annual national income as measured in Gross Domestic Product (GDP) by the end of 2014. At the end of last year, Greece's overspend was equivalent to 9% of GDP in 2011. | Greece has promised to reduce its budget deficit to below 3% of annual national income as measured in Gross Domestic Product (GDP) by the end of 2014. At the end of last year, Greece's overspend was equivalent to 9% of GDP in 2011. |
| Successive Greek governments have managed to trim 17bn euros from government spending. That has brought the country's total debt down from more than 160% of GDP to 132% according to official figures released on Monday. | Successive Greek governments have managed to trim 17bn euros from government spending. That has brought the country's total debt down from more than 160% of GDP to 132% according to official figures released on Monday. |
| Under the terms of its international loan agreement with the troika, Greece has vowed to reduce its total debt to 120% of GDP by 2020. | Under the terms of its international loan agreement with the troika, Greece has vowed to reduce its total debt to 120% of GDP by 2020. |
| But, Prime Minister Antonis Samaras would have had to have raised another 12bn euros through higher taxes and the sale of public assets such as the country's loss-making railways to have met this bailout target. | But, Prime Minister Antonis Samaras would have had to have raised another 12bn euros through higher taxes and the sale of public assets such as the country's loss-making railways to have met this bailout target. |
| August debt payment | August debt payment |
| The re-run of general elections and political instability as parties scrambled to form a governing coalition has delayed work by the troika and the government to agree a credible plan to restore the nation's finances. | The re-run of general elections and political instability as parties scrambled to form a governing coalition has delayed work by the troika and the government to agree a credible plan to restore the nation's finances. |
| On Monday, a European Commission spokesman said the troika would not be in a position to report its findings and release the final 31.5bn euro instalment of bailout money until September. | On Monday, a European Commission spokesman said the troika would not be in a position to report its findings and release the final 31.5bn euro instalment of bailout money until September. |
| "The Commission is confident that the decision on the next disbursement will be taken in the near future, although it is unlikely to happen before September," he said. | "The Commission is confident that the decision on the next disbursement will be taken in the near future, although it is unlikely to happen before September," he said. |
| That leaves Greece in a difficult situation. A 3.8bn euro debt repayment to the ECB falls due on 20 August. Without the troika money, the ECB may be forced to step in to provide temporary aid. | That leaves Greece in a difficult situation. A 3.8bn euro debt repayment to the ECB falls due on 20 August. Without the troika money, the ECB may be forced to step in to provide temporary aid. |
| But further debt repayments are due in September so failure to secure the bailout money could push Greece to the brink of insolvency. | But further debt repayments are due in September so failure to secure the bailout money could push Greece to the brink of insolvency. |
| If Greece were to default on its outstanding loans that, in turn, could force it to exit the eurozone and return to the drachma. | If Greece were to default on its outstanding loans that, in turn, could force it to exit the eurozone and return to the drachma. |