EUR/USD is trading at $1.3285, down 0.4% on the day, after Athens announced a 4.6% drop in gross domestic product for the second quarter of 2013, compared with the same period last year. Economists were actually expecting a decline of 5%, so it wasn’t all bad news. On the plus side, the contraction is an improvement on the first-quarter GDP figures, which revealed a 5.6% decline. Nevertheless, if its economy keeps shrinking Greece will be on track for its sixth consecutive annual contraction.
The austerity measures imposed by the troika are crippling the Greek economy, as it difficult to encourage economic growth while cutting public spending and raising taxes. The nation received several cash injections from the European Central Bank-led consortium, which prevented the nation from running out of cash. Given the small improvement in Greek GDP figures, the German finance ministry stated that Greece will not receive any more haircuts on its outstanding debt. However, some economists believe the level of debt is unsustainable, and this is weighing on the euro.