The EU has sharply cut the growth forecast for Greece

The EU sharply cut the growth forecast for Greece on Thursday, sparking worries that a long delay in its bailout programme was damaging the economy.

The Greek economy will grow by 2.1 percent in 2017, the European Commission said in its spring economic forecast.

This was compared to the prediction of 2.7 percent made in February.

The commission, the EU's executive arm, also slashed the growth forecast for 2018 to 2.5 percent from the earlier prediction of 3.1 percent.

Greece and its creditors agreed a third, 86-billion-euro ($94-billion) bailout deal in July 2015, but a row with the IMF over debt relief has held up the programme.

A compromise is required to unblock a tranche of loans Greece needs for debt repayments of seven billion euros in July.

Additional debt relief for Greece has proved a contentious point for many of its European creditors including powerful Germany, where additional concessions are unpopular with an electorate called to a general election in September.