The eurozone has slumped into its longest recession ever, after economic activity across the region fell for the sixth quarter in a row.
Economic output across the single currency area fell by 0.2% in the first three months of 2013, Eurostat reported yesterday.
France, Spain, Italy and the Netherlands all saw their economies shrink as the economic crisis in the eurozone continued to hit its largest economies.
Eurostat’s figures showed that the eurozone economy has now contracted by 1% over the last year, putting further pressure on leaders as unemployment climbs to new record highs.
The 0.2% contraction in the first quarter of 2013 was an improvement on the 0.6% drop recorded between October and December, but analysts warned that the eurozone’s economic outlook is darkening.
Italy’s new prime minister, Enrico Letta, was given an early reminder of the challenge he faces, with Italian GDP falling by 0.5%. Italy’s economy has now been shrinking for the last seven quarters, its longest recession since at least 1970.
Portugal's recession continues, with a 0.3% drop in GDP - a much smaller decline than the 1.8% slump recorded in the last quarter of 2012.
Beyond the eurozone, the Czech Republic suffered a 0.8% decline in GDP during the quarter. Eurostat’s figures also showed that the European Union shrank by 0.1% during the last quarter, despite the UK growing by 0.3%.
Figures released last week showed that Spain’s economy contracted by 0.5%.
On the anniversary of his inauguration, Francois Hollande’s France was announced to have entered a shallow recession in the first quarter of the year as the economy contracted by 0.2 percent, as figures from Germany also showed that it had got off to an unexpectedly weak start to the year with a marginal growth of just 0.1 percent.
The data from the INSEE (National Institute of Statistics and Economic Studies) statistics agency, also released yesterday, marks France's first recession in four years.
The gross domestic product contracted because of weak exports, investment and household spending, after shrinking the same amount in the last quarter of 2012.
Two consecutive quarters of contracting GDP are indicative of an economy in recession.
The announcement comes after the number of jobless people hit an all-time high in March.
French growth has faltered with increasing unemployment undermining the confidence of both consumers and businesses, which are struggling to cope with government belt-tightening.
European Commission President Jose Manuel Barroso said that Paris needed to present a credible programme of structural reforms after the commission offered France two extra years to bring its public deficit in line with an EU limit of three percent of GDP.
Barroso was due to meet French President Francois Hollande in Brussels yesterday.
Most private sector economists say the economy would be lucky to grow 0.1 percent this year, as Hollande's government forecast last month that it would.
Official data also published yesterday showed Germany, Europe's biggest economy, had been battling freezing winter weather, sagging exports and weak investment.
Germany's GDP grew by an anaemic 0.1 percent in the period from January to March, following a brief and sharp contraction of 0.7 percent in the fourth quarter, the federal statistics office Destatis calculated in a preliminary estimate.
The number fell short of analysts' expectations for slightly stronger growth of 0.3 percent in the first quarter.
All this sets the stage for a very important European Council that will take place next week, and which will focus on growth.
As a postscript, it is worrying to note that once again the data from Malta are absent from the Eurostat figures. It is high time for the government to analyse the deficit in NSO and to boost up its human resources, if that is, as one suspects, the problem.