"Growth in Germany and stagnation in France prevented a steeper decline in euro-zone output in the period. But with signs growing that these two core economies will struggle during the rest of the year, the prospects for the euro-zone as a whole look set to deteriorate.
The poor outlook will put more pressure on the European Central Bank to intervene to support the economy, mainly by trying to start credit flowing again through a paralyzed financial system. (...) The euro zone as a whole isn't yet in recession, owing to its zero growth reading in the first quarter.
"The euro zone has been able to avoid a 'technical' recession (...) thanks to the flat outcome in the first quarter which was a result of the unexpectedly strong data out of Germany," said Ken Wattret, economist at BNP Paribas. "As things stand, however, that looks like being a temporary reprieve," he said. "With numerous forward-looking indicators of economic activity signaling a continued contraction in GDP in the third quarter, it probably won't be long before the recession is made official"."