Greece faces recession warning as bailout talks set to reopen

Athens

GREECE'S most influential think-tank warned on Thursday of a sharp drop back into recession in a report that came hours after Parliament approved a second package of reform measures aimed at securing a new bailout from international lenders.

In its quarterly report, the IOBE institute said that capital controls imposed last month to stop a bank run pushing the financial system into collapse would exact a heavy toll across the economy.

Reversing a forecast for growth this year of one per cent made as recently as April, IOBE said the economy would contract by as much as 2-2.5 per cent after growing 0.7 per cent …