Greek debt crisis: The economy won't start growing until 2017

Jessica Morris
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Tsipras reiterated previous calls for debt relief (Source: Getty)

The Greek government unveiled a dismal 2016 budget today.

The The draft budget forecasts that the country's economy will shrink by 2.3 per cent this year, staying in recession in 2016 with a 1.3 per cent contraction, before returning to growth in 2017.

It was released as Prime Minister Alexis Tsipras delivered his keynote four-year policy programme to the Greek parliament.

Tsipras issued a resounding call for debt relief which has previously been ruled out by creditors such as Germany.

Read more: Greece's humiliation has exposed the lie at the heart of the European Union

"We will propose an extension of (loan) maturities, a reduction of interest rates and a conversion to stable interest rates," he said.

"We will also propose a growth clause (linking the amount of debt service to GDP growth) and an extended grace period (on debt service payments) to create enough fiscal space to support investment activity and the restructuring of our welfare state."

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