Eurozone Slips Back into Recession

The eurozone has returned to recession as the region's debt crisis keeps on denting  demand, latest official statistics show.

The economy of the 17-nation bloc contracted by 0.1% between July and September, after shrinking 0.2% in the previous three months, Eurostat said.

The eurozone was last in recession in 2009.

The German economy, Europe's largest, grew by 0.2% in the third quarter — slowing a little further, but performing slightly better than expected.

Germany's economy grew by 0.2%, down from growth of 0.3% recorded in the second quarter and the 0.5% figure seen in the first three months of this year.

Germany's growth was driven mainly by "foreign demand", federal statistics office agency Destatis said

Figures released in the past week from the eurozone's hardest hit economies show that the Spanish economy contracted by 0.3% between June and September and Portugal by 0.8%.

The contraction was deeper than the second quarter's 6.3% fall and comes days after parliament passed a stringent 2013 budget, which is expected to continue to stifle growth for most of next year.

Greece has been in recession since late 2008 and has been granted two bailouts from the European Union and International Monetary Fund.

Eurozone ministers decided to give Greece two more years, until 2016, to meet its deficit-reduction targets, but delayed their final say on the latest EUR 31.5 B tranche of bailout funds.

The ministers meeting in Brussels earlier this year endorsed a proposal to extend from 2014 to 2016 a deadline for Greece to reduce its budget deficit, as demanded by international lenders.

The ministers will meet again to discuss releasing the latest tranche of bailout funds on 20 November.

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