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Euro economy shrinks 0.2 percent in Q2

February 16. 2013 4:14PM

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(AP) Europe edged closer to recession Tuesday after official figures showed the region's output shrank 0.2 percent in the second quarter of the year.

Had Eurostat, the European Union's statistics office, also recorded a contraction in the first quarter too, instead of staying flat, the region would be in recession officially defined as two straight quarters of falling output.

The continued strength of Germany, Europe's biggest economy, helped lift the region out of another recession. Its economy grew by a quarterly rate of 0.3 percent in the second quarter. Though down on the 0.5 percent recorded in the first quarter, the advance was a little more than expected most economists thought Germany would only grow by 0.2 percent.

Though Germany continues to benefit from a still-growing global economy, its high-value exporters are finding it increasingly difficult to tap international markets. The other 16 countries that use the euro are its biggest market and six of them are in recession. The U.S. is also coming off the boil, with growth in the second quarter down at a quarterly rate of 0.4 percent, according to Eurostat.

Greece, Spain, Italy, Cyprus and Portugal are all in recession and all five are at the front-line of Europe's debt crisis. Bailed out Ireland could join the grouping when it publishes its second-quarter figures.

Associated Press

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