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Gross domestic product across the 17-nation euro zone contracted by 0.3% in the final three months of 2011 compared to the previous quarter the European Union statistics agency Eurostat said in a preliminary estimate released Wednesday. Economists had forecast a 0.4% contraction. GDP in the euro zone grew by 0.1% in the third quarter. Compared to the final quarter of 2010, the economy grew 0.7%. Earlier, national data showed that Germany, Europe's largest economy, shrank by a smaller-than-expected 0.2% in the fourth quarter, while France unexpectedly grew. Italy saw its GDP contract for a second consecutive quarter, meeting a widely-used definition of recession.
The Italian economy contracted for a second consecutive quarter in the final three months of 2011, meeting a widely-used definition of recession, official data showed Wednesday. The country's national statistics office, Istat, said preliminary gross domestic product shrank 0.7% in the fourth quarter compared to the previous three months. Third-quarter GDP shrank by 0.2%. Compared to the final quarter of 2010, Europe's third-largest economy contracted by 0.5%. Economists surveyed by Dow Jones Newswires had forecast a 0.4% quarterly contraction. Earlier, national data showed German GDP shrank less than expected in the fourth quarter, while French GDP unexpectedly grew. Preliminary euro-zone GDP data is set for release at 5 a.m. Eastern.
German gross domestic product shrank by a seasonally- and calendar-adjusted 0.2% in the fourth quarter of 2011 compared to the previous three months, the federal statistics office, Destatis, reported Wednesday. Compared to the final quarter of 2011, Europe's largest economy grew by 2%. Economists polled by Dow Jones Newswires had forecast German GDP to shrink by 0.3% on a quarterly basis and to expand 1.8% compared to the final quarter of 2010. France's statistics agency, Insee, reported GDP saw quarterly growth of 0.2% and expanded 1.7% compared to the final quarter of 2010. Economists had expected French GDP to shrink 0.1% on a quarterly basis.
The escalating brinkmanship came as fresh data showed that Greece's economy contracted by 6.8pc last year and at an accelerating 7pc rate in the last quarter, far worse than expected by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) "troika".
The Greek people have been pushed to the limit by austerity measures demanded by the EU and IMF, the country's public order minister says.
Christos Papoutsis said Greece had made "superhuman" efforts to comply, and the people "can't take any more".
Eurozone chiefs cancelled a meeting with Greek officials earlier, demanding further cuts and reassurances.
International lenders have told Greece to make huge cuts in return for a 130bn euro ($170bn, £109bn) bailout package.