Debt crisis: Greek economy is in a 'Great Depression' says Samaras

Greece is in a "Great Depression" similar to the American one in the 1930s, the country's Prime Minister Antonis Samaras told former US President Bill Clinton on Sunday.

Greek Prime Minister Antonis Samaras welcomes former US president Bill Clinton, during their meeting in Athens on Sunday. 

Mr Samaras's comments come two days before a team of Greece's debt inspectors arrive in Athens to push for further austerity measures if the debt-laden country wants to qualify for further rescue payments and avoid a chaotic default.

Athens wants to soften the terms of a €130bn euro bailout agreed last March with the European Union and the International Monetary Fund, to soften their impact on an economy going through its worst post-war recession.

Greek GDP is expected by the end of this to have shrunk by about a fifth in five consecutive years of recession since 2008, hammered by tax hikes, spending cuts and wage reductions required by two EU/IMF bailouts. Unemployment climbed to a record 22.6pc in the first quarter.

"You had the Great Depression in the United States," Samaras told Clinton, who was visiting Greece as part of a delegation of Greek-American businessmen. "This is exactly what we're going through in Greece - it's our version of the Great Depression."

Athens must reduce its budget deficit below 3pc of GDP by the end of 2014, from 9.3pc of GDP in 2011 - requiring almost another €12bn euros in cuts and higher taxes on top of the 17 billion successive governments have cut from the budget shortfall.