Summary Box: Greek economy contracts by 1.5 percent in second quarter amid austerity cuts

Summary Box: Austerity moves hit Greek recession

THE DROP: Greece’s gross domestic product fell 1.5 percent from the previous quarter. The unemployment rate, meanwhile, rose to 12 percent in May with nearly one in three young people out of work.

WHAT’S BEHIND IT: The government’s drive to reduce its debt load with aggressive austerity cuts has spawned a sharp drop in investment and public spending.

THE BACKDROP: Greece’s deficit stands at 13.6 percent of GDP. The government has pledged to slash it to 8.1 percent this year. Weighed down by its deficit and high public debt, Greece narrowly avoided bankruptcy in May. In return for a three-year €110 billion ($144.5 billion) loan package from other EU countries, the government cut salaries and pensions and hiked taxes.