Europe's big guns backfiring

Three of Europe's biggest economies have suffered some major setbacks this week as the global economic downturn continues apace...

Germany has plunged deeper into recession, registering a 2.1% contraction in fourth-quarter GDP. It is the country's worst quarterly performance since reunification in 1990. Meanwhile neighbour France took one step closer to recession, registering a 1.2% decline in GDP for the fourth quarter.

Germany's Federal Statistics Office said the contraction, which was slightly more severe than forecast, was led by a decline in investment and a collapse in exports. Economic activity had already contracted by 0.5% in the second and third quarters of the year, the statistics service noted.

Meanwhile French GDP contracted at its fastest pace in 34 years. It was its first quarter of shrinkage in 2008 after a surprise 0.1% rise in the third quarter. Job cuts and falling output in France placed it on track to join Britain, Spain and Germany in recession in 2009.

Spain also affected?

Spain entered a technical recession yesterday when it reported GDP fell 1.1% in the final quarter of 2008, following a 0.2% decline in the previous three-month period.

Spain's economy, the fifth-biggest in Europe, had previously enjoyed a remarkable run, with a GDP growth rate of 3.7% in 2007.

But it has been badly hit by the global downturn, particularly the construction sector - a central factor in Spain's growth for over a decade.

Source: www.Ananova.com