Greece to present debt inspectors 'alarming' data

ATHENS, Greece – Greece's new government will present "alarming" data on its recession and unemployment to international debt inspectors this week, in a bid to renegotiate the terms of its bailout agreements.

Government spokesman Simos Kedikoglou said in a television interview Tuesday that the data would demonstrate that the current austerity program was counterproductive.

Greece is relying on rescue loans from its partners in the eurozone and the International Monetary Fund to avoid bankruptcy. In exchange, it has made painful austerity cuts, such as tax hikes and cuts to public sector jobs, pensions and salaries.

Along with uncertainty over the country's finances, those austerity measures have hit the economy hard — it is in a fifth year of recession, with unemployment topping 22 percent, roughly double the eurozone average.

The Greek government will argue that it cannot withstand the current pace of austerity terms. Debt inspectors from the European Commission, the European Central Bank and the IMF are due in Athens Wednesday.

"We will present information that is astounding. It is alarming in terms of the recession and unemployment, and it shows beyond any doubt that the current policy does not bring results. It brings the opposite results," Kedikoglou told private Antenna television.

Christos Staikouras, a deputy finance minister, said the recession was expected to deepen further later this year, quoting from a recent study by Greece's Center of Planning and Economic Research, or KEPE, that carries out studies for the government.

"The economy is in turmoil and the situation has reached an untenable point," Staikouras said.

The economy contracted by 6.5 percent in the first quarter of 2012, he said. It is estimated to shrink a stunning 9.1 percent in the third quarter for a 6.7 percent contraction for the year as a whole, according to KEPE. That is almost twice as bad as official predictions made a few months ago.

Conservative Prime Minister Antonis Samaras has promised to seek more time to meet the deficit reduction targets, after winning a general election last month and joining traditional rival Socialists in a coalition government.

Evangelos Venizelos, the Socialist leader, said a renegotiation of bailout terms was inevitable.

"Greece, regardless of which government represents it, cannot remain indifferent to this deep recession ... that is approaching an aggregate 20 percent of gross domestic product. No government can remain indifferent to an unemployment rate that exceeds 22 percent and 55 among young people," he said.

"The extension of the economic adjustment program is the cornerstone of the country's strategy and of the basis of the coalition government's cooperation."

Rescue creditors have so far appeared cool to the idea of extending Greece's deficit reduction deadlines.

On Monday, a senior official from the European Central Bank, Joerg Asmussen, warned that lengthening the program would simply put off unavoidable reforms, and could threaten efforts to make Greek national debt sustainable.