25 Jul 2012

Worse to come for Greece - PM

10:04 am on 25 July 2012

Prime Minister Antennas Samaras of Greece says the country will suffer a much deeper recession than thought this year.

He expects the economy to shrink by 7%, which is more than the 5% previously forecast by the Bank of Greece.

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.

Representatives of the International Monetary Fund, European Central Bank and European Commission are in Athens to try and get its deficit cutting measures back on track.

If not, economists calculate Greece may need a third rescue package worth up to 50 billion euros.

Assistance for Greece totalling 130 billion euros was agreed in March, its second major rescue package.

But further debt repayments are due in September so failure to secure bailout money could push Greece to the brink of insolvency.

Meanwhile European Commission president Jose Manuel Barroso is to visit Greece this week for the first time since 2009.

A spokesman said the purpose of the meeting is to discuss the overall economic situation in Europe and in particular in Greece with Mr Samaras.