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German and French economies contract

Hopes of economic recovery in eurozone thrown into doubt after figures confirm its two largest economies have performed worse than forecast.

La rédaction de Mediapart

This article is freely available.

Hopes of economic recovery in the eurozone have been thrown into doubt after figures confirmed its two largest economies had performed worse than forecast, reports Sky News.

Gross Domestic Product (GDP) in Germany fell by 0.6% on the previous quarter in the final three months of 2012 - its biggest contraction since 2009 and further evidence that the wider slowdown in Europe is hurting the health of the single currency bloc's biggest economy.

Exports - the motor behind its economic engine - did most of the damage as demand fell across Europe in particular where the debt crisis has left many nations in recession.

France's 0.3% fall in GDP was also a touch worse than expected.

Back revisions to the French figures also showed its output fell by 0.1% in each of the first and second quarters of 2012, meaning the country has already experienced one bout of recession in the last twelve months.

The revelation prompted French Prime Minister Jean-Marc Ayrault to acknowledge for the first time on Wednesday that weak growth was putting his government's deficit goal for 2013 out of reach.

GDP figures for the eurozone as a whole released today were also worse than expected.

They were forecast to show a quarter-on-quarter drop of 0.4% but Eurostat measured a 0.6% fall.

The measure from the EU's statistics office means that the bloc has now contracted for three straight quarters - a recession is officially defined as two quarters of negative growth.

Read more of this report from Sky News.