Greece's Economy Predicted To Shrink In 2014

Nov 28, 2013
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NPR's business news begins with more gloom for Greece.


WERTHEIMER: A new report predicts the Greek economy will shrink for the seventh straight year. This is adding fuel to a debate over austerity measures imposed on the country by foreign lenders.

Joanna Kakissis reports.

JOANNA KAKISSIS, BYLINE: The forecast came out yesterday by the Paris-based Organization for Economic Cooperation and Development. It contrasts with that of the Greek government - which says the economy will grow in 2014.

OECD head Angel Gurria told a Greek TV station that a slowing global economy will also hurt Greece.

ANGEL GURRIA: The growth of Greece will depend to a very great extent on its own reforms but also on the behavior of all the other countries.

KAKISSIS: Gurria says the country's lenders - which include the European Union and the International Monetary Fund - must lighten Greece's debt load.

GURRIA: Our recommendation, the sooner the better.

KAKISSIS: But Germany - which has contributed most of the eurozone bailout money - opposes cutting the country any slack on its loan payments. And the Germans say the Greeks should stay on a course of deregulation and privatization.

The OECD report also predicts deflation will continue. For regular Greeks that could mean lower prices.

That is welcome by Nikos Aivatzidis, a father of three whose shipyard job hasn't paid him in almost two years.

NIKOS AIVATZIDIS: (Foreign language spoken)

KAKISSIS: Prices must come down, he says, so people can survive.

But as the OECD noted, deflation means Greece will have less money to pay back its loans.

For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.