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Newport International Group Economy News updates

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Europe's two largest economies, Germany and France, both shrank markedly in the last three months of 2012,

suggesting the euro zone has slipped deeper into recession.

The German economy contracted by 0.6 percent on the quarter, official data showed on Thursday, marking its

worst performance since the global financial crisis was raging in 2009.

France's 0.3 percent fall was also a touch worse than expectations.

Worryingly for Berlin, it was export performance - the motor of its economy - that did most of the damage

although economists expect it to bounce back quickly.

"In the final quarter of 2012 exports of goods declined significantly more than imports of goods," the German

Statistics Office said in a statement.

The euro hit a session low against the dollar after the weaker than forecast German reading.

Back revisions to the French figures showed its output fell by 0.1 percent 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.

While the European Central Bank's pledge to do whatever it takes to save the euro has taken the heat out of

the bloc's debt crisis, even its stronger members are gripped by an economic malaise that could push debt-

cutting drives off track.

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