* Q3 GDP contracts 7.2 pct yr/yr -flash estimate
* Anti-austerity strikes sweep Europe, millions protest
By Renee Maltezou
ATHENS, Nov 14 Greece's economic slump deepened
in the third quarter, with output shrinking 7.2 percent on an
annual basis as the debt-laden country heads into its sixth year
of depression and struggles to meet its bailout targets.
The contraction was deeper than the second quarter's 6.3
percent drop and follows the passage of a tough 2013 budget by
Prime Minister Antonis Samaras's government that is expected to
continue to smother growth for most of next year.
Since 2009, the Mediterranean state's economic decline -
which Samaras has dubbed Greece's "Great Depression" - has wiped
a fifth off economic output and sent unemployment to a record
high, putting one in four Greeks out of work.
The reading could point to an even grimmer outlook, analysts
said, because it was offset by better-than-expected returns from
the country's vital tourism sector, which accounts for a fifth
of Greece's 215 billion euro economy.
A new wave of wage and pension cuts and tax hikes agreed
with the country's international lenders for 2013, coupled with
a liquidity shortage, was expected to add to the economic
misery, making recovery even more distant.
"The recession will continue to deepen until the first half
of 2013, due to the implementation of all the cuts," said
Xenophon Damalas, head of investment services at Marfin Egnatia
bank in Athens.
"If we hadn't had such a good picture in tourism this year,
the recession would have been deeper."
Greece's GDP for the quarter was 20 percent lower in real
terms than output in the third quarter of 2008, when the
downturn began. The estimate, released by statistics service
ELSTAT, was based on seasonally unadjusted data. It gave no
In its mid-term fiscal plan, the government said it expects
the economy to shrink 6.5 percent in 2012 and 4.5 percent next
year. It forecasts a slight recovery to begin at the end of 2013
and growth of 0.2 percent in 2014.
Spain is also in recession, and fellow austerity-hit
Portugal's contraction deepened in the third quarter, with
export growth slowing and domestic demand hit by an austerity
programme imposed under the country's international bailout.
Portugal's economy shrank 3.4 percent year on year, National
Statistics Institute INE said on Wednesday, accelerating from
the previous quarter's revised 3.2 percent drop.
Millions of workers joined strikes across southern Europe on
Wednesday to protest against austerity measures that labour
unions say have brought misery and deepened the region's
With a peaceful three-hour work stoppage against austerity,
Greek workers joined protesters in Italy, France, Belgium,
Portugal and Spain, where labour unions held their first
coordinated general strike as part of a "European Day of Action
Greece's prolonged slide has undermined its ability to hit
targets laid out in its bailout programme by undercutting budget
revenues and feeding popular anger over belt-tightening.
The country of 11 million is awaiting the release of more
than 30 billion euros in aid from its international lenders, the
European Union and the International Monetary Fund, to pay off
debt and shore up its banking sector.
But a public clash between the lenders over how Athens can
bring its debts down to a sustainable level reignited fears that
its and Europe's broader debt troubles could flare up anew.