The euro zone’s debt-ravaged economy shrank in the second quarter after staying flat in the first, despite continued German growth, while France managed to escape recession with zero-growth.
The 17-nation currency bloc contracted by 0.2% from last year, data showed on Tuesday. Germany eked out growth of 0.3%, marginally beating forecasts, but its forward-looking ZEW sentiment index for investment slid for a fourth month running.
Neighbouring France logged zero growth for the third consecutive quarter. The central bank has already warned that it expects a mild contraction in the third quarter.
Austria and Holland almost matched Germany’s performance, posting growth of 0.2% each.
Finland, one of Germany’s northern European allies in pushing for austerity, suffered a 0.7% year-on-year fall in GDP. Bailed-out Portugal’s recession deepened with GDP diving by 1.2% and Cyprus contracted by 0.8 %.
Earlier on Monday, data showed that Greece’s economy shrank 6.2% year-on-year. Debt-hit Spain’s bank borrowings from the European Central Bank too hit a record high of nearly ¤376 billion in July.